##### Table of Contents



As
filed with the Securities and Exchange Commission on October 29, 2008
   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, 2008
 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)
 *
    
    Not for trading, but only in connection with the registration of
American Depositary Shares, pursuant to the requirements of the
Securities and Exchange Commission.
     þ o
  o þ
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  U.S. GAAP o
    
    International financial Report Standards as 
issued
    
    Other oby the International Accounting Standards 
Board  þ
  o þ
  o þ
  þ o




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##### 



TABLE OF CONTENTS
 Part I
    
    5Item 1. Identity of Directors, Senior Management and Advisers
    
    5Item 2. Offer Statistics and Expected Timetable
    
    5Item 3. Key Information
    
    5Item 4. Information on the Company
    
    21Item 4A. Unresolved Staff Comments
    
    89Item 5. Operating and Financial Review and Prospects
    
    90Item 6. Directors, Senior Management and Employees
    
    114Item 7. Major Shareholders and Related Party Transactions
    
    130Item 8. Financial Information
    
    132Item 9. The Offer and Listing
    
    134Item 10. Additional Information
    
    137Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    149Item 12. Description of Securities Other than Equity Securities
    
    151Part II
    
    156Item 13.Defaults, Dividend Arrearages and Delinquencies
    
    156Item 14. Material Modifications to the Rights of Security and Use of Proceeds
    
    157Item 15. Disclosure Controls and Procedures
    
    158Item 16.[Reserved]Item 16A. Audit Committee Financial Expert
    
    161Item 16B. Code of Ethics
    
    161Item 16C. Principal Accountant Fees and Services
    
    162Item 16D. Exemptions from Listing Standards for Audit Committees
    
    163Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    164Part III
    
    165Item 17. Financial Statements
    
    165Item 18. Financial Statements
    
    166Item 19. Exhibits
    
    167SIGNATURE
    
    170INDEX TO FINANCIAL STATEMENTS
    
    F-1Exhibit 4.22Exhibit 4.23Exhibit 4.24Exhibit 4.25Exhibit 4.26EX-4.27Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2
  2




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##### Table of Contents



USE OF TERMS AND CONVENTIONS IN THIS ANNUAL REPORT
 Harmony South Africa we us our Group South African government Government
 R Rand c A$ Kina K $ U.S.$ 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 IASB SEC U.S. GAAP
 Item 5 Operating and Financial Review and
Prospects  Costs  Reconciliation of Non-GAAP Measures
  3




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##### Table of Contents



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.
  4




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##### Table of Contents



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
    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
 Fiscal year ended June 30,2008
    
    2007
    
    2006
    
    2005
    
    2004($ in millions, except per share amounts)Income Statement DataRevenue
    
    
    1,269
    
    
    
    1,116
    
    
    
    937
    
    
    
    953
    
    
    
    955Operating profit/(loss)
    
    
    73
    
    
    
    154
    
    
    
    (104
    )
    
    
    (322
    )
    
    
    (73
    )Loss from associates
    
    
    (11
    )
    
    
    (3
    )
    
    
    (17
    )
    
    
    
    
    
    
    (Loss)/profit from
continuing operations before
taxation
    
    
    (39
    )
    
    
    156
    
    
    
    (91
    )
    
    
    (517
    )
    
    
    (3
    )Taxation
    
    
    (65
    )
    
    
    (39
    )
    
    
    (22
    )
    
    
    87
    
    
    
    1(Loss)/profit from
continuing operations
    
    
    (104
    )
    
    
    117
    
    
    
    (113
    )
    
    
    (430
    )
    
    
    (2
    )Profit/(loss) from
discontinued operations
    
    
    74
    
    
    
    (66
    )
    
    
    22
    
    
    
    (70
    )
    
    
    (35
    )Net (loss)/profit
    
    
    (30
    )
    
    
    51
    
    
    
    (91
    )
    
    
    (500
    )
    
    
    (37
    )
 5




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##### Table of Contents



Fiscal year ended June 30,2008
    
    2007
    
    2006
    
    2005
    
    2004($ in millions, except per share amounts)Basic (loss)/earnings per
share from continuing
operations ($)
    
    
    (0.26
    )
    
    
    0.29
    
    
    
    (0.29
    )
    
    
    (1.19
    )
    
    
    (0.01
    )Diluted (loss)/earnings per
share from continuing
operations ($)
    
    
    (0.26
    )
    
    
    0.29
    
    
    
    (0.29
    )
    
    
    (1.19
    )
    
    
    (0.01
    )Basic (loss)/earnings per
share ($)
    
    
    (0.08
    )
    
    
    0.12
    
    
    
    (0.23
    )
    
    
    (1.38
    )
    
    
    (0.15
    )Diluted (loss)/earnings per
share ($)
    
    
    (0.08
    )
    
    
    0.12
    
    
    
    (0.23
    )
    
    
    (1.38
    )
    
    
    (0.15
    )Weighted average number of
shares used in the
computation of basic
(loss)/earnings per share
    
    
    400,750,167
    
    
    
    397,910,797
    
    
    
    393,727,012
    
    
    
    361,816,512
    
    
    
    253,558,000Weighted average number of
shares used in the
computation of diluted
(loss)/earnings per share
    
    
    402,894,248
    
    
    
    402,382,011
    
    
    
    393,727,012
    
    
    
    361,817,512
    
    
    
    254,888,334Dividends per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.05
    
    
    
    0.10Other Financial DataCash cost per ounce of gold
from continuing operations
($/oz) (1)
    
    
    591
    
    
    
    479
    
    
    
    440
    
    
    
    383
    
    
    
    339Total cash cost per ounce of
gold ($/oz) (1)
    
    
    589
    
    
    
    486
    
    
    
    436
    
    
    
    379
    
    
    
    333
 June 30,2008
    
    2007
    
    2006
    
    2005
    
    2004($ in millions)Balance Sheet DataAssetsProperty, plant and equipment
    
    
    3,531
    
    
    
    3,484
    
    
    
    3,263
    
    
    
    3,385
    
    
    
    3,731Non-current assets
classified as held for sale
    
    
    197
    
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    Other assets
    
    
    982
    
    
    
    1,494
    
    
    
    1,432
    
    
    
    1,433
    
    
    
    1,256Total assets
    
    
    4,710
    
    
    
    5,160
    
    
    
    4,695
    
    
    
    4,818
    
    
    
    4,987Equity and liabilitiesTotal equity
    
    
    3,172
    
    
    
    3,366
    
    
    
    3,249
    
    
    
    3,489
    
    
    
    3,464Borrowings (current and
non-current)
    
    
    525
    
    
    
    653
    
    
    
    500
    
    
    
    563
    
    
    
    461Other liabilities
    
    
    1,013
    
    
    
    1,141
    
    
    
    946
    
    
    
    766
    
    
    
    1,062Total equity and liabilities
    
    
    4,710
    
    
    
    5,160
    
    
    
    4,695
    
    
    
    4,818
    
    
    
    4,987
 
 (1)
    
    Total cash costs and total cash costs per ounce are
non-GAAP measures. We have calculated cash costs per ounce
by dividing total cash costs, as determined using the
guidance provided by the Gold Institute, by gold ounces
sold for all periods presented. 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 provided by the Gold Institute,
include mine production costs, transport and refinery
costs, applicable general and administrative costs, costs
associated with movements in production inventories and ore
stockpiles, ongoing environmental rehabilitation costs as
well as transfers to and from deferred stripping and costs
associated with royalties. 6




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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 as issued by the IASB.
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. 7




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EXCHANGE RATES
    Fiscal Year EndedJune 30,
    
    Average(1)
    
    Period End2004
    
    
    6.89
    
    
    
    6.232005
    
    
    6.18
    
    
    
    6.672006
    
    
    6.36
    
    
    
    7.172007
    
    
    7.20
    
    
    
    7.042008
    
    
    7.26
    
    
    
    7.80
 Month of
    
    High
    
    LowMay 2008
    
    
    7.76
    
    
    
    7.47June 2008
    
    
    8.12
    
    
    
    7.70July 2008
    
    
    7.92
    
    
    
    7.31August 2008
    
    
    7.90
    
    
    
    7.24September 2008
    
    
    8.28
    
    
    
    7.77October 2008
(through October 21, 2008)
    
    
    10.67
    
    
    
    8.27
 
 (1)
    
    The average of the noon buying rates provided by the
Federal Reserve Bank of New York on the last day of each
full month during the relevant period.  8




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CAPITALIZATION AND INDEBTEDNESS
  9




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REASONS FOR THE OFFER AND USE OF PROCEEDS
  10




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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. Any of these risks could have a materially 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, 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.
  11




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Price per ounceHigh
    
    Low
    
    AverageCalendar Year
    
    ($)
    
    ($)
    
    ($)1998
    
    
    313
    
    
    
    273
    
    
    
    2941999
    
    
    326
    
    
    
    253
    
    
    
    2792000
    
    
    313
    
    
    
    264
    
    
    
    2822001
    
    
    293
    
    
    
    256
    
    
    
    2712002
    
    
    332
    
    
    
    278
    
    
    
    3092003
    
    
    412
    
    
    
    322
    
    
    
    3612004
    
    
    427
    
    
    
    343
    
    
    
    3892005
    
    
    476
    
    
    
    411
    
    
    
    4342006
    
    
    725
    
    
    
    525
    
    
    
    6042007
    
    
    841
    
    
    
    608
    
    
    
    6952008
(through October 21, 2008)
    
    
    1,011
    
    
    
    741
    
    
    
    775
   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.
  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.
  12




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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 production, 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
 13




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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.
   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.
  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.
   14




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##### Table of Contents



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.
  
    
    accidents associated with operating a waste dump and rock transportation;
    
    pillar mining; and
    
    production disruptions caused by weather.
  The nature of our mining operations presents safety risks.
  Our insurance coverage may prove inadequate to satisfy future claims against us.
  15




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##### Table of Contents



Our operations may be negatively impacted by inflation.
  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 the South African Reserve Bank (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
    
    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
  16




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##### Table of Contents



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.
     We may suffer adverse consequences as a result of our reliance on outside contractors to conduct
our operations.
  
    
    negotiating agreements with contractors on acceptable terms;
    
    the inability to replace a contractor and its operating equipment in the event that either
party terminates the agreement;
    
    reduced control over those aspects of operations which are the responsibility of the contractor;
    
    failure by a contractor to perform in terms of its agreement with us;
    
    interruption of operations in the event that a contractor ceases to operate due to insolvency
or other unforeseen events;
    
    failure of a contractor to comply with applicable legal and regulatory requirements, to the
extent it is responsible for such compliance; and
    
    contractors problems regarding management of its workforce, labor unrest or other employment
issues.
 Directors, Senior Management and
EmployeesEmployees
 HIV
& AIDS poses risks to us in terms of productivity and costs.
  The cost of occupational healthcare services may increase in the future.
 Mine
Health and Safety Act
 17




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Laws governing mineral rights affect our business.
 MPRDA RegulationHealth and Safety MattersSouth Africa
 Mining Charter
 HDSAs
   Regulation
 18




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We are subject to extensive environmental regulations.
  DME
    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.
 19




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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
  Investors may face liquidity risk in trading our ordinary shares on the JSE Limited.
 The Offer and ListingThe Securities Exchange in South Africa.
 Because we have a significant number of outstanding share options and convertible debt instruments,
our ordinary shares are subject to dilution.
  20




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##### Table of Contents



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
  Item 4. Disposals .
  South African Operations
   Item 4 Operational Strategy: Back to Basics Harmonys Management Structure
  21




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##### Table of Contents




    
    Tshepong, Phakisa, Bambanani, Doornkop, Elandsrand, Target, Evander
operations, Masimong, Virginia operations and Cooke operations
(classified as discontinued operations); 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 or Other  Surface.
 International Operations
  Dioro
   Monarch Gold See Recent Developments
 Morobe Wafi Newcrest Recent Developments
 PFS
 
    
    Golpu stand alone (an update of the Golpu PFS scenario);
    
    Golpu + Link Zone (high grade lenses within Zone B); and
    
    Golpu + Link Zone + Non-Refractory gold ore (NRG1);
 Gate Reviews CPR
 22




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##### Table of Contents



Strategy
  
    
    First, we undertook to review our operational performance and maintain
a clear operational focus. This entailed developing an understanding
of what our operations were capable of delivering, devising and
putting in place the plans to ensure delivery, and holding management
responsible for that delivery.
    
    Second, we assessed our assets, to focus our attention on those
operations that were core to the business and had the ability to be
profitable. At the same time, we identified and initiated joint
ventures we believed where these assets could better cater for the
medium- and longer-term health of the company and bring about greater
value.
    
    Finally, we undertook to improve the financial viability of the
business and to substantially overhaul the balance sheet. In so doing,
we focused on improving operational performance, combined with the
sale of non-core assets and partnering in joint ventures. We undertook
to identify opportunities to sustain and grow production. While our
exploration work in PNG continues, we are also about to begin with
some organic exploration work at Evander in South Africa. This element
of our strategy is at an early stage and will be an area of increased
attention during the year ahead.
  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 ore reserves as of June 30, 2008 amounted to 50.5 million ounces
of gold spread across our assets in South Africa and PNG. This ore
reserve base is sufficient to support our existing production profile
in excess of 10 years at current production levels. Year-on-year
depletion accounted for a decrease of 1.9 million ounces in the
reserves. Corporate activity, the exclusion of operations held for
sale, restructuring of certain shafts and geological related changes
accounts for a further decrease of 5.7 million ounces of reserves. On
the positive side there is a net addition of 4.4 million ounces of
reserves from surface stockpiles.
    
    Of our 50.5 million ounces of reserves, 38.3 million ounces are
classified as above infrastructure and 12.2 million ounces are
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 Elandsrand, Doornkop, Tshepong and Phakisa
in South Africa, and Hidden Valley in PNG, which, when developed, could deliver up
to 1.4 million ounces of additional production by 2012.
 23




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##### Table of Contents




    
    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 Mega Dumps projects, the processing of rock
dumps, and developing the Wafi/Golpu copper/gold deposit in PNG, which, when all
developed, could increase production by 1.0 million ounces per annum.
    
    We have also expanded our exploration skill base, evidenced by our progress in PNG.
    
    We formed Rand Uranium (Proprietary) Limited (Rand
Uranium), to which we will transfer 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 2008 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 U.S.$1,030 per ounce on March 17, 2008
and, while it was a more subdued U.S.$772 per ounce as of
October 21,
2008, this is 3% 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 return to 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.
 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.
 24




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##### Table of Contents



Leading Black Economic Empowerment strategy
 
    
    We are proud to be a South African company and fully embraces the
countrys transformation initiatives. We are 16% owned by African
Rainbow Minerals Limited (ARM Limited), a black empowerment company in which
our chairman, Patrice Motsepe, owns an interest.
    
    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.
 Strategy of organic growth
  Organic growth focused on high quality ounces
 
    
    Our extensive experience and established track record of successfully identifying,
exploring and developing our own projects is a core component of our value
creation strategy.
    
    Our ongoing exploration program is focused on both on-mine exploration, which
targets resources within the economic radius of existing mines, and new mine
exploration, which targets promising early to advanced stage projects around the
world.
    
    We are currently expanding our production base in South Africa and PNG, with a
focus on developing new mines at competitive cash costs and upgrading the overall
quality of our portfolio.
    
    We currently have a diverse project pipeline, comprising five projects that are
well advanced and, if all developed, could deliver up to 1.4 million ounces of
low-cost production by 2012. These projects include Elandsrand New Mine, Doornkop
South Reef, Tshepong Sub 66 and Sub 71 Declines and Phakisa in South Africa, and
Hidden Valley in PNG, which, if all developed, would contribute to a reduction in
our overall cash costs per ounce when they come on-stream.
    
    In addition to these projects, we have a number of additional development
prospects that are being progressed, including surface sand dumps, rock dumps and
tailings dams, reviewing the potential of our uranium deposits, and developing the
Wafi/Golpu copper/gold deposit in PNG, which, when an investment decision is taken
by the board to develop them once feasibility studies are complete, could increase
production by up to 1.0 million ounces.
    
    We have also expanded our exploration skill base, evidenced by our progress in PNG.
 Operational Strategy: Back to Basics:
  Safety
   25




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##### Table of Contents




    
    management to lead by example;
    
    continuous verbal communication with all team members;
    
    visible creation of awareness of safety-related issues;
    
    award and recognize safety achievements; and
    
    the involvement of all stakeholders.
  Empowered management teams
 
    
    At each mining site, we have
established small, multi-disciplinary, focused management teams
responsible for planning and implementing the mining operations at the
site. Each of these teams is accountable for the results at its
particular site and reports directly to the Board.
 Active involvement and management
 
    
    Annual operational goals and targets, including cost, volume and grade
targets are established in consultation with our executive committee
for each mining site. Each management team develops an operational
plan to implement the goals and targets for its mine site. Members of
our executive committee review and measure the results at each mining
site on a regular basis throughout the year.
 Focus on increased productivity
 
    
    Gold mining in South Africa is labor intensive, accounting for about
50% of our South African operating costs. To control these costs, we
structures our operations to achieve maximum productivity with the
goal of having 60% of our workforce directly engaged in stoping, or
underground excavation, and development rock breaking activities.
 Commitment to cost control
 
    
    We are committed to reducing our cost base and, to this end, we
benchmark our costing parameters both internally among our operations
and externally against other gold producers.
 Proactive maintenance practices
 
    
    We apply a principle of appropriate maintenance which allows us to
spend capital commensurate with the life of a specified operation.
This principle ensures safe operation and reduces capital that may be
used ineffectively on mines that have a limited life.
 Implementation of new systems
 
    
    We have implemented cost accounting systems and strict ore accounting
and ore reserve management systems to measure and track costs and ore
reserve depletion accurately, so as to enable us to be proactive in
our decision-making.
 Increasing consistency at our operations
 
    
    We are committed to increasing the consistency of our operations, in
terms of both gold ore grades and production levels, in order to
extract optimal value from our orebodies. To achieve this, we are
continuing with our intensive program to significantly improve the
mining flexibility of our operations by increasing our development
expenditure and focusing on comprehensive ore
 26




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##### Table of Contents



reserve management. We have made significant progress on this objective, as evidenced by our
development rates.
    
    We are currently reviewing potential opportunities in respect of
certain deposits and assets which we may develop independently of our
core gold business, and in particular, our uranium assets, of which
the underground resources are not currently reflected on our balance
sheet or reserve statement.
 Selected acquisitions that diversify our operations and complement our competitive strengths
 
    
    We have a long track-record of acquisitions, having completed over 25
transactions and successfully integrating each of these operations
into the Company.
    
    We possess broad and extensive gold mining experience gained through
the development and operation of both surface, opencast mines and
mechanized, underground mines. This breadth of expertise provides us
with a competitive advantage when evaluation acquisition
opportunities.
 Targeted disposals that will upgrade our overall portfolio quality
 
    
    We have accumulated a diverse portfolio of assets, a number of which
are nearing the end of their productive lives for us and are
considered non-core to our business. However, these assets may be of
higher value to smaller producers who are less concerned about short
mine lives, and can still profitably operate these assets for a number
of years.
    
    As a result, we believe our disposal strategy will create value
through the targeted sale of these assets, which for us have
relatively higher cost bases and/or shorter mine lives. See
Disposals below.
 Initiatives that target specific opportunities
 
    
    We acknowledge significant capital expenditure and a commitment to a
long time horizon are required to develop our projects into new mines.
However, we firmly believe that this is the foundation of our future,
and to this end, have made substantial investments in our major
projects both in South Africa and PNG.
 Principal Investments
  Pamodzi Item 4 Disposals
 Rio Tinto
 Western Areas Gold Fields Item 4 Disposals Item 4 Disposals
 Village
 27




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##### Table of Contents



Item 7. Related Party Transactions.
 RMB Item 7. Related Party Transactions
 Disposals
 Item 8 Recent Developments
            Hedging Policy
  28




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##### Table of Contents



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 ore 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.
  29




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##### Table of Contents



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 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.
   Item 4. Information on the Company Regulation  Mineral Rights.
 Harmonys Management Structure
  Capital Expenditures
  30




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##### Table of Contents



Item 4 Recent Developments
  Business  Harmonys Mining Operations Item 4. Information on the Company  Business  Harmonys Mining Operations  Evander Operations .
 Reserves
  
    
    normal depletion of 1.9 million ounces;
    
    corporate activity, the exclusion of operations held for sale, restructuring
of certain shafts and geological-related changes resulting in a decrease of
5.7 million ounces; and
    
    a net addition of 4.4 million ounces of ore reserves from surface stockpiles.
 SAMREC Code JORC SAMREC
   
    
    the database of measured and indicated resource blocks (per shaft section);
    
    an assumed gold price which, for this ore reserve statement, was taken as R180,000 per kilogram;
    
    planned production rates;
    
    the mine recovery factor (MRF) which is equivalent to the mine call factor (MCF) multiplied
by the plant recovery factor; and
    
    planned cash costs (cost per tonne).
 31




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32




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##### Table of Contents



Ore reserve statement (Imperial) as at June 30, 2008 (2)
 Gold
 PROVEN
    
    PROBABLE
    
    TOTALTons
    
    Grade
    

Gold(1)
    
    Tons
    
    Grade
    

Gold(1)
    
    Tons
    
    Grade
    

Gold(1)Operations
    
    (million)
    
    (oz/ton)
    
    (Moz)
    
    (million
    
    (oz/ton)
    
    (Moz)
    
    (millions)
    
    (oz/ton)
    
    (Moz)South Africa UndergroundTshepong
    
    
    6.64
    
    
    
    0.177
    
    
    
    1.18
    
    
    
    19.32
    
    
    
    0.176
    
    
    
    3.39
    
    
    
    25.96
    
    
    
    0.176
    
    
    
    4.57Phakisa
    
    
    0.09
    
    
    
    0.217
    
    
    
    0.02
    
    
    
    21.87
    
    
    
    0.243
    
    
    
    5.30
    
    
    
    21.96
    
    
    
    0.242
    
    
    
    5.32Bambanani
    
    
    3.15
    
    
    
    0.283
    
    
    
    0.89
    
    
    
    1.09
    
    
    
    0.268
    
    
    
    0.29
    
    
    
    4.24
    
    
    
    0.279
    
    
    
    1.18Doornkop
    
    
    0.37
    
    
    
    0.118
    
    
    
    0.04
    
    
    
    1.11
    
    
    
    0.124
    
    
    
    0.14
    
    
    
    1.48
    
    
    
    0.123
    
    
    
    0.18Elandskraal
    
    
    4.83
    
    
    
    0.186
    
    
    
    0.90
    
    
    
    39.56
    
    
    
    0.195
    
    
    
    7.73
    
    
    
    44.39
    
    
    
    0.194
    
    
    
    8.63Masimong
    
    
    4.01
    
    
    
    0.147
    
    
    
    0.59
    
    
    
    1.09
    
    
    
    0.155
    
    
    
    0.17
    
    
    
    5.1
    
    
    
    0.148
    
    
    
    0.76Virginia operations
    
    
    5.92
    
    
    
    0.127
    
    
    
    0.75
    
    
    
    2.63
    
    
    
    0.144
    
    
    
    0.38
    
    
    
    8.55
    
    
    
    0.132
    
    
    
    1.13Evander
    
    
    3.08
    
    
    
    0.202
    
    
    
    0.62
    
    
    
    8.12
    
    
    
    0.163
    
    
    
    1.32
    
    
    
    11.20
    
    
    
    0.173
    
    
    
    1.94Evander(below infrastructure)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57.24
    
    
    
    0.213
    
    
    
    12.21
    
    
    
    57.24
    
    
    
    0.213
    
    
    
    12.21Target
    
    
    9.22
    
    
    
    0.214
    
    
    
    1.97
    
    
    
    12.72
    
    
    
    0.179
    
    
    
    2.28
    
    
    
    21.94
    
    
    
    0.194
    
    
    
    4.25Other  underground
    
    
    0.90
    
    
    
    0.144
    
    
    
    0.13
    
    
    
    2.14
    
    
    
    0.149
    
    
    
    0.32
    
    
    
    3.04
    
    
    
    0.145
    
    
    
    0.45Total S.A. Underground
    
    
    38.21
    
    
    
    0.185
    
    
    
    7.09
    
    
    
    166.89
    
    
    
    0.201
    
    
    
    33.53
    
    
    
    205.10
    
    
    
    0.198
    
    
    
    40.62South Africa surfaceKalgold
    
    
    12.46
    
    
    
    0.026
    
    
    
    0.33
    
    
    
    1.79
    
    
    
    0.037
    
    
    
    0.07
    
    
    
    14.25
    
    
    
    0.028
    
    
    
    0.39Free Gold
    
    
    803.16
    
    
    
    0.007
    
    
    
    5.68
    
    
    
    77.39
    
    
    
    0.010
    
    
    
    0.80
    
    
    
    880.55
    
    
    
    0.007
    
    
    
    6.47Total S.A. Surface
    
    
    815.62
    
    
    
    0.007
    
    
    
    6.01
    
    
    
    79.18
    
    
    
    0.011
    
    
    
    0.87
    
    
    
    894.80
    
    
    
    0.008
    
    
    
    6.88PNGHidden Valley and Kaveroi
    
    
    3.64
    
    
    
    0.067
    
    
    
    0.24
    
    
    
    24.46
    
    
    
    0.059
    
    
    
    1.46
    
    
    
    28.10
    
    
    
    0.060
    
    
    
    1.70Hamata
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.33
    
    
    
    0.074
    
    
    
    0.32
    
    
    
    4.33
    
    
    
    0.074
    
    
    
    0.32Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.63
    
    
    
    0.018
    
    
    
    0.97
    
    
    
    54.63
    
    
    
    0.018
    
    
    
    0.97Total PNG
    
    
    3.64
    
    
    
    0.067
    
    
    
    0.24
    
    
    
    83.42
    
    
    
    0.033
    
    
    
    2.75
    
    
    
    87.06
    
    
    
    0.034
    
    
    
    2.99Grand total
    
    
    857.47
    
    
    
    0.016
    
    
    
    13.34
    
    
    
    329.49
    
    
    
    0.113
    
    
    
    37.15
    
    
    
    1,186.96
    
    
    
    0.043
    
    
    
    50.49
 
 (1)
    
    Gold oz 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 stated above. The approximate metallurgical recovery factors for the table above are as follows: Elandskraal 96%; Free State 95%; Randfontein 95%; Evander 97%; Kalgold 90%; Freegold 96%; Target 97%; PNG 93%. In order to derive the appropriate plant recovery factors for ore reserve estimates a
process have been followed where realistic assumptions based on historical performance have been applied. There may be short term fluctuation either positive or negative which can lead to small discrepancies between actual and planned recovery factors.(2)
    
    Cut-off grades are calculated per individual shaft, each having its own unique cost structure, ore flow and recovery factors, which are entered into our Optimizer software for a cut-off calculation per shaft and expressed in oz/t units. 33




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##### Table of Contents



SILVERProven
    
    
    
    
    
    
    
    
    
    Probable
    
    
    
    
    
    
    
    
    
    TotalReserves
    
    
    
    
    
    
    
    
    
    Reserves
    
    
    
    
    
    
    
    
    
    ReservesTons
    
    Grade
    
    Silver oz
    
    Tons
    
    Grade
    
    Silver oz
    
    Tons
    
    Grade
    
    Silver ozPNG
    
    (millions)
    
    (oz/ton)
    
    (millions)
    
    (millions)
    
    (oz/ton)
    
    (millions)
    
    (millions)
    
    (oz/ton)
    
    (millions)Hidden Valley and
Kaveroi
    
    
    3.64
    
    
    
    1.197
    
    
    
    4.36
    
    
    
    24.46
    
    
    
    1.077
    
    
    
    26.35
    
    
    
    28.10
    
    
    
    1.093
    
    
    
    30.71GRAND TOTAL
    
    
    3.64
    
    
    
    1.197
    
    
    
    4.36
    
    
    
    24.46
    
    
    
    1.077
    
    
    
    26.35
    
    
    
    28.10
    
    
    
    1.093
    
    
    
    30.71
 COPPERProven
    
    
    
    
    
    
    
    
    
    Probable
    
    
    
    
    
    
    
    
    
    TotalReserves
    
    
    
    
    
    
    
    
    
    Reserves
    
    
    
    
    
    
    
    
    
    ReservesTons
    
    Grade
    
    Cu lbs
    
    Tons
    
    Grade
    
    Cu lbs
    
    Tons
    
    Grade
    
    Cu lbsPNG
    
    (millions)
    
    (%)
    
    (millions)
    
    (millions)
    
    (%)
    
    (millions)
    
    (millions)
    
    (%)
    
    (millions)Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.63
    
    
    
    1.025
    
    
    
    1,234.0
    
    
    
    54.63
    
    
    
    1.025
    
    
    
    1,234.0GRAND TOTAL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.63
    
    
    
    1.025
    
    
    
    1,234.0
    
    
    
    54.63
    
    
    
    1.025
    
    
    
    1,234.0
 MOLYBDENUMProven
    
    
    
    
    
    
    
    
    
    Probable
    
    
    
    
    
    
    
    
    
    TotalReserves
    
    
    
    
    
    
    
    
    
    Reserves
    
    
    
    
    
    
    
    
    
    ReservesTons
    
    Grade
    
    Mo lbs
    
    Tons
    
    Grade
    
    Mo lbs
    
    Tons
    
    Grade
    
    Mo lbsPNG
    
    (millions)
    
    (lbs/ton)
    
    (millions)
    
    (millions)
    
    (lbs/ton)
    
    (millions)
    
    (millions)
    
    (lbs/ton)
    
    (millions)Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.63
    
    
    
    0.238
    
    
    
    13.00
    
    
    
    54.63
    
    
    
    0.238
    
    
    
    13.00GRAND TOTAL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.63
    
    
    
    0.238
    
    
    
    13.00
    
    
    
    54.63
    
    
    
    0.238
    
    
    
    13.00
  Worldwide Operations
 Description of Property
  
  Hectares
    
    AcresDoornkop
    
    
    2,941
    
    
    
    7,267Elandsrand
    
    
    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
 34




---



##### Table of Contents



Hectares
    
    AcresMt. Magnet
    
    
    97,491
    
    
    
    240,906Cooke (Randfontein)
    
    
    7,875
    
    
    
    19,460Lindum (Randfontein)
    
    
    3,231
    
    
    
    7,983Total
    
    
    108,597
    
    
    
    268,349
  Hectares
    
    AcresPNG
    
    
    220,600
    
    
    
    545,114Total Worldwide Operations
    
    
    426,472
    
    
    
    1,053,826
  Geology
    Harmonys Mining Operations  Overview
  Item 4 South African Operations
 35




---



##### Table of Contents




    
    Tshepong (formerly part of Freegold)
    
    Phakisa (formerly part of Freegold)
    
    Bambanani (formerly part of Freegold)
    
    Doornkop (formerly part of Randfontein)
    
    Cooke operations (consists of Cooke 1, 2 and 3 shafts, formerly part of Randfontein)
    
    Elandsrand
    
    Masimong (formerly part of the Free State region)
    
    Virginia operations (consists of Harmony 2, Merriespruit 1 & 3, Unisel and Brand 3
& 5, all formerly part of the Free State region)
    
    Target (forms part of Avgolds operations)
    
    Evander (consists of Evander 5, 7 and 8)
    
    Joel (formerly part of Freegold, now included under Other  Underground)
  
    
    Free State (also known as Phoenix)
    
    Randfontein (Cooke plant has been classified as discontinued
operations along with the Cooke operations)
    
    Freegold
    
    Kalgold
    
    Target
   
    
    Mt. Magnet  The site has put on care and maintenance as at the end of
December 2007. On August 1, 2008, the Monarch Golds administrator
indicated that Monarch Gold would not proceed with the proposed
purchase, and consequently the agreement was terminated. We have
since resumed management of the of the Mt. Magnet operations and
recommenced the sales process  See International Operations above.
    
    South Kalgoorlie  we finalized the sale of this operation with Dioro
on November 30, 2007  See Disposals above.
   
    
    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.
  South African Mining Operations
 Unless indicated otherwise, the discussions below are for continuing operations.
 
 36




---



##### Table of Contents



Underground
 Tshepong, Phakisa and Bambanani
 Introduction: FS 1 Plant
 History:
 Geology:
 Mining Operations:
    37




---



##### Table of Contents



Item 5 Operating and Financial Review and Prospects  Conops
  Safety: LTFR FFR
 LTFR
    
    
    FFRTshepong
    
    
    18.52
    
    
    
    0.17Phakisa
    
    
    4.83
    
    
    
    0.37Bambanani
    
    
    11.18
    
    
    
    0.40
  Plants:
  Average Milled forProcessing
    
    the Fiscal YearPlant
    
    Capacity
    
    Ended June 30, 2008(tons/month)
    
    (tons/month)FS 1
    
    
    420,000
    
    
    
    416,447
  Production analysis:
 Fiscal Year Ended June 30,Tshepong
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    1,649
    
    
    
    1,824
    
    
    
    1,786Recovered grade (ounces/ton)
    
    
    0.166
    
    
    
    0.175
    
    
    
    0.188Gold sold (ounces)
    
    
    273,119
    
    
    
    318,887
    
    
    
    335,289
 38




---



##### Table of Contents



Fiscal Year Ended June 30,Tshepong
    
    2008
    
    2007
    
    2006Results of operations(millions) ($)Product sales
    
    
    223
    
    
    
    203
    
    
    
    180Cash cost
    
    
    125
    
    
    
    112
    
    
    
    111Cash profit
    
    
    98
    
    
    
    91
    
    
    
    69Cash costsPer ounce of gold ($)
    
    
    457
    
    
    
    351
    
    
    
    332Capex(millions) ($)
    
    
    27
    
    
    
    26
    
    
    
    21
      Capital Expenditure:
 Fiscal Year Ended June 30,Phakisa
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    34
    
    
    
    
    
    
    
    Recovered grade (ounces/ton)
    
    
    0.123
    
    
    
    
    
    
    
    Gold sold (ounces)
    
    
    4,212
    
    
    
    
    
    
    
    
 39




---



##### Table of Contents



Fiscal Year Ended June 30,Phakisa
    
    2008
    
    2007
    
    2006Results of operations (millions) ($)Product sales
    
    
    4
    
    
    
    
    
    
    
    Cash cost
    
    
    2
    
    
    
    
    
    
    
    Cash profit
    
    
    2
    
    
    
    
    
    
    
    Cash costsPer ounce of gold ($)
    
    
    556
    
    
    
    
    
    
    
    Capex (millions) ($)
    
    
    40
    
    
    
    32
    
    
    
    23
   Capital Expenditure:
 Fiscal Year Ended June 30,Bambanani
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    912
    
    
    
    1,283
    
    
    
    1,402Recovered grade (ounces/ton)
    
    
    0.174
    
    
    
    0.154
    
    
    
    0.143Gold sold (ounces)
    
    
    158,985
    
    
    
    197,060
    
    
    
    200,739Results of operations (millions) ($)Product sales
    
    
    128
    
    
    
    126
    
    
    
    106Cash cost
    
    
    102
    
    
    
    115
    
    
    
    101Cash profit
    
    
    26
    
    
    
    11
    
    
    
    5Cash costsPer ounce of gold ($)
    
    
    641
    
    
    
    586
    
    
    
    502Capex(millions) ($)
    
    
    15
    
    
    
    17
    
    
    
    14
       40




---



##### Table of Contents



Capital Expenditure:
 Doornkop
 Introduction Randfontein
 History
 Geology
    Mining Operations:
    41




---



##### Table of Contents



Safety
  Plants
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)Doornkop
    
    
    220,000
    
    
    
    144,537
  Production analysis:
 Fiscal Year Ended June 30,Doornkop
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    494
    
    
    
    597
    
    
    
    515Recovered grade (ounces/ton)
    
    
    0.089
    
    
    
    0.096
    
    
    
    0.085Gold sold (ounces)
    
    
    44,413
    
    
    
    57,364
    
    
    
    43,593Results of operations(millions) ($)Product sales
    
    
    35
    
    
    
    37
    
    
    
    23Cash cost
    
    
    31
    
    
    
    25
    
    
    
    24Cash profit
    
    
    4
    
    
    
    12
    
    
    
    (1
    )Cash costsPer ounce of gold ($)
    
    
    703
    
    
    
    439
    
    
    
    558Capex(millions) ($)
    
    
    48
    
    
    
    38
    
    
    
    26
    42




---



##### Table of Contents



Capital Expenditure:
 Elandsrand
 Introduction:
 History:
 Geology:
  Mining Operations:
   43




---



##### Table of Contents




    
    22 kv system to 100 level was completed and commissioned.
    
    The turbine dam between 92 and 95 level was completed during the year.
    
    The development of the refrigeration chambers on 98 and 100 level was completed.
    
    The centre hole of the No.3 Backfill shaft was drilled during the year and the preparation for
the sinking of the sub-bank was started in June 2008.
    
    The end of capital position was reached on 113 level RAW East.
    
    The centralized blasting system was installed and commissioned on 102, 105, 109 and 113 levels.
    
    All piping associated with the pumping on 115 level was installed during the year including
all electrical panels associated with the pumping.
    
    The chilled water feed and return shaft columns were installed in No.2 Backfill shaft from 95
to 105 level.
    Safety
 Plants:
  Average Milled for theProcessing
    
    Fiscal YearPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)Elandsrand Plant
    
    
    185,000
    (1)
    
    
    81,713
 44




---



##### Table of Contents



(1)
    
    Processing capacity will reach its optimal capacity upon completion of the Elandsrand New Mine Project.  Production analysis:
 Fiscal Year Ended June 30,Elandsrand
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    981
    
    
    
    1,117
    
    
    
    987Recovered grade (ounces/ton)
    
    
    0.162
    
    
    
    0.174
    
    
    
    0.173Gold sold (ounces)
    
    
    158,631
    
    
    
    194,710
    
    
    
    170,867Results of operations(millions) ($)Product sales
    
    
    133
    
    
    
    124
    
    
    
    90Cash cost
    
    
    103
    
    
    
    103
    
    
    
    89Cash profit
    
    
    30
    
    
    
    21
    
    
    
    1Cash costsPer ounce of gold ($)
    
    
    652
    
    
    
    527
    
    
    
    523Capex(millions) ($)
    
    
    44
    
    
    
    33
    
    
    
    31
       Capital Expenditure:
 45




---



##### Table of Contents



Masimong
 Introduction:
 History:
 Geology:
 Mining Operations:
   Safety
 Plants Item 4 South
African Mining Operations  Virginia Operations  Plants
 Production analysis:
 Fiscal Year Ended June 30,Masimong Shaft Complex
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    892
    
    
    
    1,074
    
    
    
    1,020Recovered grade (ounces/ton)
    
    
    0.132
    
    
    
    0.138
    
    
    
    0.133Gold sold (ounces)
    
    
    117,575
    
    
    
    147,958
    
    
    
    136,153Results of operations(millions) ($)Product sales
    
    
    96
    
    
    
    95
    
    
    
    73Cash cost
    
    
    88
    
    
    
    82
    
    
    
    67Cash profit
    
    
    8
    
    
    
    13
    
    
    
    6Cash costsPer ounce of gold ($)
    
    
    745
    
    
    
    559
    
    
    
    489Capex(millions) ($)
    
    
    16
    
    
    
    15
    
    
    
    14
  46




---



##### Table of Contents



Capital Expenditure:
 Virginia operations
 Introduction:
 History:
 47




---



##### Table of Contents



Geology:
   Mining Operations:
    st
   48




---



##### Table of Contents



Safety:
 Plants:
  Average Milledfor the Fiscal YearProcessing
    
    EndedPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)Central
    
    
    168,000
    
    
    
    141,500Saaiplaas
    
    
    500,000
    
    
    
    583,650
  Fiscal Year Ended June 30,Virginia operations
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    2,349
    
    
    
    2,507
    
    
    
    2,368Recovered grade (ounces/ton)
    
    
    0.107
    
    
    
    0.106
    
    
    
    0.117Gold sold (ounces)
    
    
    250,324
    
    
    
    266,948
    
    
    
    276,285Results of operations(millions) ($)Product sales
    
    
    204
    
    
    
    172
    
    
    
    146Cash cost
    
    
    180
    
    
    
    147
    
    
    
    135Cash profit
    
    
    24
    
    
    
    25
    
    
    
    11Cash costsPer ounce of gold ($)
    
    
    719
    
    
    
    546
    
    
    
    487Capex(millions) ($)
    
    
    20
    
    
    
    19
    
    
    
    14
  49




---



##### Table of Contents



50




---



##### Table of Contents



Capital Expenditure
 Target
 Introduction:
 History:
 Geology:
     Mining operations:
   51




---



##### Table of Contents



Safety:
  Plants:
   Average Milled For theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)Target Plant
    
    
    105,000
    
    
    
    97,973
  Production analysis:
 Fiscal Year Ended June 30,Target
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    686
    
    
    
    904
    
    
    
    813Recovered grade (ounces/ton)
    
    
    0.124
    
    
    
    0.158
    
    
    
    0.185Gold sold (ounces)
    
    
    85,006
    
    
    
    142,433
    
    
    
    150,196Results of operations(millions) ($)Product sales
    
    
    69
    
    
    
    91
    
    
    
    81Cash cost
    
    
    51
    
    
    
    53
    
    
    
    52Cash profit
    
    
    18
    
    
    
    38
    
    
    
    29Cash costsPer ounce of gold ($)
    
    
    605
    
    
    
    370
    
    
    
    346Capex(millions)($)
    
    
    35
    
    
    
    16
    
    
    
    10
   52




---



##### Table of Contents



Capital Expenditure:
 Evander Operations
 Introduction:
 History:
 Geology:
 Mining Operations:
 53




---



##### Table of Contents




    
    Project currently at an exploration stage following the prefeasibility study;
    
    Surface exploration drilling to be carried out in order to improve quality
of and confidence in the current estimate; and
    
    Drilling to commence in October 2008.
  
    
    Project at an initial exploration stage following the geological study;
    
    Underground development and drilling, underground and from surface, is planned in
order to investigate the 7 Shaft flank of the postulated payshoot; and
    
    Feasibility study to follow, pending confirmation of the ore resource in this area.
  
    
    Joint Venture with the African Precious Minerals (APM) is being formed to
explore these two target areas;
    
    APM is going to earn in the 52% equity stake upon completion of the full
bankable feasibility study for each area; and
    
    The geological studies are under way and drilling will commence in fiscal 2009.
  
    
    It is a future mining area of the current Shaft 8;
    
    Pre-feasibility study is being updated with more recent cost and gold price factors; and
    
    Synergies with the current Shaft 8 deepening could be considered.
  
    
    Surface exploration drilling is required to bring this project into the full bankable feasibility study;
    
    Pre feasibility study is due to be updated (after the Rolspruit study) with costs and gold price
factors; and
    
    The surface exploration drilling at Evander South is likely to produce information that will enhance
the Poplar geological interpretation.
  Safety:
 54




---



##### Table of Contents



Plants:
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)Kinross-Winkelhaak
    
    
    200,000
    
    
    
    120,564
  Production analysis:
 Fiscal Year Ended June 30,Evander operations
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    1,447
    
    
    
    1,667
    
    
    
    1,700Recovered grade (ounces/ton)
    
    
    0.166
    
    
    
    0.141
    
    
    
    0.161Gold sold (ounces)
    
    
    240,037
    
    
    
    235,443
    
    
    
    274,439Results of operations(millions) ($)Product sales
    
    
    193
    
    
    
    151
    
    
    
    142Cash cost
    
    
    127
    
    
    
    113
    
    
    
    111Cash profit
    
    
    66
    
    
    
    38
    
    
    
    31Cash costsPer ounce of gold ($)
    
    
    525
    
    
    
    481
    
    
    
    404Capex(millions) ($)
    
    
    33
    
    
    
    28
    
    
    
    26
    55




---



##### Table of Contents



Capital Expenditure:
 Other  Underground
 Introduction:
 History:
 Geology
 Mining operations
   Safety
 Plants:
 Production analysis:
 Fiscal Year Ended June 30,Joel
    
    2008
    
    
    2007
    
    
    2006ProductionTons (000)
    
    
    449
    
    
    
    504
    
    
    
    436Recovered grade (ounces/ton)
    
    
    0.136
    
    
    
    0.158
    
    
    
    0.134Gold sold (ounces)
    
    
    61,215
    
    
    
    79,923
    
    
    
    58,595Results of operations(millions) ($)Product sales
    
    
    52
    
    
    
    51
    
    
    
    31Cash cost
    
    
    39
    
    
    
    33
    
    
    
    29Cash profit
    
    
    13
    
    
    
    18
    
    
    
    2Cash costsPer ounce of gold ($)
    
    
    639
    
    
    
    418
    
    
    
    498Capex(millions) ($)
    
    
    5
    
    
    
    4
    
    
    
    4
 56




---



##### Table of Contents



Capital Expenditure:
 Other  Surface
 Introduction
 Kalgold
 Introduction:
 57




---



##### Table of Contents



History:
 Geology: .
   Mining Operations:
  Safety:
 Plants:
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)CIL
    
    
    135,000
    
    
    
    127,552Heap Leach(1)
    
    
    
    
    
    
    
 
 (1)
    
    Active use of heap leaching was discontinued in July 2001.  Production analysis:
 Fiscal Year Ended June 30,Kalgold
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    1,687
    
    
    
    1,740
    
    
    
    2,008Recovered grade (ounces/ton)
    
    
    0.055
    
    
    
    0.032
    
    
    
    0.038Gold sold (ounces)
    
    
    93,172
    
    
    
    56,129
    
    
    
    77,071
 58




---



##### Table of Contents



Fiscal Year Ended June 30,Kalgold
    
    2008
    
    2007
    
    2006Results of operations(millions) ($)Product sales ($)
    
    
    77
    
    
    
    36
    
    
    
    39Cash cost ($)
    
    
    38
    
    
    
    27
    
    
    
    32Cash profit ($)
    
    
    39
    
    
    
    9
    
    
    
    8Cash costsPer ounce of gold ($)
    
    
    411
    
    
    
    485
    
    
    
    412Capex($)
    
    
    1
    
    
    
    
    
    
    
    
        Capital Expenditure:
 Phoenix
 Introduction
 History
 Mining operations
  59




---



##### Table of Contents



Production analysis:
 Fiscal Year Ended June 30,Free State (Phoenix)
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    7,033
    
    
    
    2,368
    
    
    
    897Recovered grade (ounces/ton)
    
    
    0.005
    
    
    
    0.009
    
    
    
    0.018Gold sold (ounces)
    
    
    32,215
    
    
    
    21,346
    
    
    
    15,902Results of operations(millions) ($)Product sales
    
    
    26
    
    
    
    14
    
    
    
    9Cash cost
    
    
    12
    
    
    
    6
    
    
    
    6Cash profit
    
    
    14
    
    
    
    8
    
    
    
    3Cash costsPer ounce of gold ($)
    
    
    381
    
    
    
    293
    
    
    
    404Capex(millions) ($)
    
    
    5
    
    
    
    5
    
    
    
    4
     Capital Expenditure:
 Cooke operations
 Introduction
  Geology
  60




---



##### Table of Contents



Mining Operations:
     Safety
  Plants:
   Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2008(tons/month)
    
    (tons/month)Cooke
    
    
    280,000
    
    
    
    215,241
  Production analysis:
 Fiscal Year Ended June 30,Cooke operations
    
    2008
    
    2007
    
    2006ProductionTons (000)
    
    
    3,906
    
    
    
    2,327
    
    
    
    2,034- Underground
    
    
    1,323
    
    
    
    1,432
    
    
    
    1,495- Surface
    
    
    2,583
    
    
    
    895
    
    
    
    539
 61




---



##### Table of Contents



Fiscal Year Ended June 30,Cooke operations
    
    2008
    
    2007
    
    2006Recovered grade (ounces/ton)
    
    
    0.060
    
    
    
    0.105
    
    
    
    0.126- Underground
    
    
    0.153
    
    
    
    0.157
    
    
    
    0.163- Surface
    
    
    0.013
    
    
    
    0.021
    
    
    
    0.022Gold sold (ounces)
    
    
    236,242
    
    
    
    243,219
    
    
    
    256,739- Underground
    
    
    201,937
    
    
    
    224,245
    
    
    
    245,089- Surface
    
    
    34,305
    
    
    
    18,974
    
    
    
    11,650Results of operations (millions) ($)Product sales
    
    
    194
    
    
    
    154
    
    
    
    137Cash cost
    
    
    123
    
    
    
    118
    
    
    
    102Cash profit
    
    
    71
    
    
    
    36
    
    
    
    35Cash costsPer ounce of gold ($)
    
    
    517
    
    
    
    484
    
    
    
    396- Underground
    
    
    516
    
    
    
    499
    
    
    
    395- Surface
    
    
    520
    
    
    
    305
    
    
    
    431Capex (millions)($)
    
    
    22
    
    
    
    19
    
    
    
    25
      Capital Expenditure:
 62




---



##### Table of Contents



Other  Discontinued operations
 Introduction: Western Australia
  Introduction:
 History:
 Geology:
 Mining operations:
   Safety:
 Plants: VRO
 Production analysis:
 Fiscal Year Ended June 30,Orkney operations
    
    2008(1)
    
    2007
    
    2006ProductionTons (000)
    
    
    571
    
    
    
    947
    
    
    
    753Recovered grade (ounces/ton)
    
    
    0.100
    
    
    
    0.126
    
    
    
    0.171Gold sold (ounces)
    
    
    57,132
    
    
    
    119,109
    
    
    
    128,774Results of operations(millions) ($)Product sales
    
    
    40
    
    
    
    77
    
    
    
    68Cash cost
    
    
    52
    
    
    
    64
    
    
    
    59Cash (loss)/profit
    
    
    (12
    )
    
    
    13
    
    
    
    9Cash costsPer ounce of gold ($)
    
    
    910
    
    
    
    543
    
    
    
    458Capex(millions) ($)
    
    
    4
    
    
    
    15
    
    
    
    7
 63




---



##### Table of Contents



(1)
    
    The results are for the eight months ended February 2008.     Capital Expenditure:
 64




---



##### Table of Contents



International Mining Operations
 
 Western Australia Operations
  HBJ
      Mt. Magnet Operations
 Introduction.
 History:
 65




---



##### Table of Contents



Geology:
 Mining Operations: .
    Plant
  Average Milled forthe Year Ended June 30, 2008Plant
    
    Processing Capacity
    
    (for 6 operational months)(tons/month)
    
    (tons/month)Mt. Magnet
    
    
    243,000
    
    
    
    161,000
   66




---



##### Table of Contents



Production analysis:
 Fiscal Year Ended June 30,2008
    
    2007
    
    2006ProductionTons (000)
    
    
    966
    
    
    
    1,875
    
    
    
    1,918Recovered grade (ounces/ton)
    
    
    0.080
    
    
    
    0.073
    
    
    
    0.078Gold sold (ounces)
    
    
    77,097
    
    
    
    136,428
    
    
    
    148,822Results of operations(millions) ($)Product sales
    
    
    56
    
    
    
    86
    
    
    
    80Cash cost
    
    
    41
    
    
    
    71
    
    
    
    59Cash profit
    
    
    15
    
    
    
    15
    
    
    
    21Cash costsPer ounce of gold ($)
    
    
    537
    
    
    
    518
    
    
    
    399Capex(millions) ($)
    
    
    4
    
    
    
    20
    
    
    
    24
     Capital Expenditure:
 Exploration:
 South Kalgoorlie Operations
 Introduction:
  History:
 67




---



##### Table of Contents



Geology:
 Mining Operations:
 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: .
   Average Milled forthe Year Ended JunePlant
    
    Processing Capacity
    
    30, 2008(tons/month)
    
    (tons/month)Jubilee
    
    
    122,000
    
    
    
    95,400
   68




---



##### Table of Contents



Production analysis:
 Fiscal Year Ended June 30,2008(1)
    
    2007
    
    2006ProductionTons (000)
    
    
    477
    
    
    
    1,391
    
    
    
    1,480Recovered grade (ounces/ton)
    
    
    0.058
    
    
    
    0.064
    
    
    
    0.056Gold sold (ounces)
    
    
    27,778
    
    
    
    88,371
    
    
    
    82,639Results of operations(millions) ($)Product sales
    
    
    19
    
    
    
    56
    
    
    
    42Cash cost
    
    
    14
    
    
    
    45
    
    
    
    38Cash profit
    
    
    5
    
    
    
    11
    
    
    
    4Cash costsPer ounce of gold($)
    
    
    517
    
    
    
    504
    
    
    
    454Capex(millions)($)
    
    
    12
    
    
    
    7
    
    
    
    4
 
 (1)
    
    The results are for the five months ended November 2007.     Capital Expenditure:
 Exploration:
 PNG Operations
 Overview
 Introduction:
 Harmony PNG tenement locations.
 69




---



##### Table of Contents




    
    Golpu stand alone (an update of the Golpu PFS scenario);
    
    Golpu + Link Zone; and
    
    Golpu + Link Zone + NRG1;
  Hidden Valley Project
 Introduction: Newcrest Recent Developments
  History:
 Site Access.
 70




---



##### Table of Contents



Engineering Procurement and Construction Management Contract.
 Power supply. PPL
  Customs and Excise.
 Mining Fleet.
 Geology:
 Environment.
 Community affairs/landowner discussions.
 Project Overview:
  71




---



##### Table of Contents



Plant:
    Government royalty and other rights.
  Third Party Royalties.
  Capital Expenditure:
  72




---



##### Table of Contents



Morobe Consolidated Goldfields Limited (MCG) Tenements
   
    
    Major new stand alone discoveries;
    
    High-grade drivers to improve cash flows of the Hidden Valley Project; and
    
    Additional reserves to substantially increase mine life of the Hidden Valley Project.
  Hidden Valley ML
 Introduction:
 Project Status:
 Kerimenge and the broader prospect potential
 Introduction:
 Project Status:
 73




---



##### Table of Contents



Figure 1: Tenement Location Map
 
 Morobe Coast Exploration License
 Introduction:
 Giu Prospect.
  Project Status:
 Wafi Golpu Project Area
 Introduction:
 74




---



##### Table of Contents



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 two 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:
 Pre-Feasibility Studies:
 Golpu PFS
 Wafi PFS
 75




---



##### Table of Contents




    
    Golpu stand alone (an update of the Golpu PFS scenario);
    
    Golpu + Link Zone; and
    
    Golpu + Link Zone + NRG1;
  Wafi Gold Projects
 Introduction:
 Geology:
  NRG1
 Project Status:
 Golpu Copper-Gold Project
 Introduction:
 Geology:
  76




---



##### Table of Contents



Project Status:
 Additional Prospects and Exploration Potential:
 Nambonga North
 Introduction:
 Project Status:
 Western Zone
 Introduction:
 Project Status:
 Wafi Regional Exploration
 Introduction:
 Project Status:
 Biamena
 Introduction:
 77




---



##### Table of Contents



Project Status:
 78




---



##### Table of Contents



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.
     79




---



##### Table of Contents




    
    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.
 PNG
     Morobe"
   Environmental Matters
 South Africa
  80




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##### Table of Contents




    
    ComplianceWe will integrate environmental policies, programs and practices into
all activities and policies of the organization as well as monitor the
performance of these programs. We will strive to comply with all
applicable municipal, provincial and national laws and regulations, as
well as the other requirements to which we subscribe that are relevant
to the environmental aspects of our activities, and encourage such
compliance from those organizations with whom we do business;
    
    Continual Improvement
We will evaluate and continually improve the effectiveness of our
environmental management system through periodic audits, management
reviews, and by achieving our environmental objectives. We will review
this Environmental Policy annually and make it available to the
public;
    
    Pollution Prevention
We will actively design, operate, and maintain our mining activities
with a focus on pollution prevention. We will strive towards the
continual reduction of adverse environmental effects, supporting the
principle of sustainable development;
    
    Awareness
We will communicate this Environmental Policy to employees,
contractors and suppliers to ensure their awareness of our commitment
to the environment. We will provide appropriate training to all
employees to ensure their continuing awareness of environmental
responsibilities.
  Scope of
    
    
    
    
    
    Measurement
    
    ComparableRegulation
    
    Aspect
    
    Element
    
    Criteria
    
    Standard (GRI)
    
    TargetAPPA/AQA
    
    Air Emissions
    
    Electricity
    
    kWh/ton
   treated/mined
    
    x
    
    15% reductionFuels
(Diesel/Petrol)
    
    Litres/CO2
  equivalents
    
    √
    
    15% reductionDust
    
    g/m2/day
    
    x
    
    15% reductionMethane
    
    CO2 equivalents
    
    √
    
    30% reductionCoal (domestic)
    
    t/year
    
    √
    
    50% reductionNWA
    
    Water
    
    Consumptive Use
    
    m3/ton
treated/mined
    
    x
    
    10% reductionMetal/Salt
Discharge:- surface
    
    tons
    
    x
    
    70% reduction- underground
    
    tons
    
    x
    
    20% reductionMPRDA and NNRA
    
    Land - recycle
    
    steel
    
    tons
    
    √
    
    All waste will be
handled through
designated areas.plastic
    
    tons
    
    xtimber
    
    tons
    
    √Oil/grease
    
    litres
    
    √
    
    50% recycledLand - use
    
    impacted
    
    ha
    
    √
    
    10% reduction
  
    
    all relevant environmental risks should be identified and prioritized;
    
    environmental issues should be dealt with promptly;
    
    environmental issues, particularly relating to continuous
non-compliance or potentially serious environmental impacts, should be
notified and dealt with at the board level; and
 81




---



##### Table of Contents




    
    we will adopt the best practicable environmental option; that is, the
option that has most benefit, or  causes the least damage to the
environment, at a cost acceptable to society and affordable to us.
   
    
    that environmental management is a corporate priority;
    
    that environmental policies, programs and practices will be integrated into our activities;
    
    that we will strive for continued improvement and efficiency;
    
    that we will work with government departments and the public to come up with the best
sustainable solutions;
    
    that contractors and suppliers will be required to comply with our policy; and
    
    that employees will be informed and educated regarding their environmental responsibilities.
 EMS
  Operation:
    
    Implementation Status:Doornkop
    
    85%
(with the Stage 1 external audit scheduled by end of November
2008)Target
    
    65%Elandsrand
    
    65%Phakisa
    
    55%
  EMF
 82




---



##### Table of Contents



DWAF NNR
  IAP
  KOSH MWC
 WBEC WUC
    83




---



##### Table of Contents




    
    Environmental inspection:general inspections are performed routinely and systematically with
collected data entered into the system to enable follow-up actions.
    
    Risk assessment:detailed and specific risk assessments are conduced to help identify
deviations that may not have been otherwise anticipated.
    
    Stakeholder communication:all communication is managed and may result in action items for
the organization for which the stakeholder will require follow-up feedback. All such
communication is logged.
    
    Monitoring:impact monitoring is focused on collecting and analyzing environmental data that
may well result in follow-up actions.
    
    Licenses/permits:all details relating to licenses or permits can be registered in the system.
    
    Major loss, incident and accident notification:when an incident occurs, initial information
about the incident is recorded to trigger a notification process.
 EIA
     84




---



##### Table of Contents



Australia
        PNG
 DEC
   85




---



##### Table of Contents




    
    development and implementation of environmental management procedures;
    
    monitoring of environmental impacts and performance; and
    
    review of procedures to ensure continual improvement.
 86




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##### Table of Contents



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 Department of Minerals and Energy, employers, employees and their
representatives.
    HIV
& AIDS Policy
 Risk Factors  Risks Relating to Our
Business and Our Industry  HIV & AIDS poses risks to Harmony in terms of productivity and costs Risk Factors  Risks Relating to Our Business and Our Industry  The cost of occupational
healthcare services may increase in the future
 NUM UASA
  87




---



##### Table of Contents



Australia
    PNG
  Risk Factors  Risks Relating to Our Business and Our Industry  HIV/AIDS poses risks to Harmony
in terms of productivity and costs Risk Factors  Risks Relating to Our Business and Our
Industry  The cost of occupational healthcare services may increase in the future
 88




---



##### Table of Contents



Item 4A. UNRESOLVED STAFF COMMENTS
  89




---



##### Table of Contents



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
    
    
    Tshepong, Phakisa, Bambanani, Doornkop, Elandsrand, Target, Evander
operations, Masimong, Virginia operations and Cooke operations
(classified as discontinued operations); 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 or Other  Surface.
 Critical Accounting Policies and Estimates
  Item 18. Financial
Statements
 Depreciation and Amortization of Mining Assets
  Item 3.
Key Information  Risk Factors  Harmonys gold reserve figures are estimated based on
 90




---



##### Table of Contents



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
   91




---



##### Table of Contents



Provision for environmental rehabilitation
  Deferred Tax Asset
  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.
     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 302008
    
    2007
    
    2006($/oz)Average
    
    
    821
    
    
    
    638
    
    
    
    527High
    
    
    1,011
    
    
    
    692
    
    
    
    726Low
    
    
    649
    
    
    
    561
    
    
    
    418
 92




---



##### Table of Contents



Fiscal Year EndedJune 302008
    
    2007
    
    2006($/oz)Harmonys average sales price  continuing operations (1)
    
    
    818
    
    
    
    638
    
    
    
    529
 
 (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
     93




---



##### Table of Contents



Continuing operations
  Fiscal year ended June 30,2008
    
    2007
    
    2006(in $ millions, except per ounce amounts)Total cost of sales from continuing operations  under IFRS
    
    
    1,122
    
    
    
    929
    
    
    
    909Depreciation and amortization expense
    
    
    (117
    )
    
    
    (106
    )
    
    
    (138
    )(Provision)/reversal of provision for rehabilitation costs
    
    
    (1
    )
    
    
    6
    
    
    
    3Care and maintenance costs of restructured shafts
    
    
    (10
    )
    
    
    (8
    )
    
    
    (22
    )Employment termination and restructuring costs
    
    
    (29
    )
    
    
    
    
    
    
    12Share-based payments
    
    
    (6
    )
    
    
    (6
    )
    
    
    (15
    )(Impairment)/reversal of impairment of assets
    
    
    (40
    )
    
    
    19
    
    
    
    30Provision for post retirement benefits
    
    
    (1
    )
    
    
    2
    
    
    
    (1
    )Total cash costs from continuing operations  using Gold Institute guidance
    
    
    918
    
    
    
    836
    
    
    
    778Per ounce calculation:Ounces sold
    
    
    1,550,527
    
    
    
    1,747,071
    
    
    
    1,769,951Total cash cost per ounce from continuing operations  using Gold
Institute guidance
    
    
    591
    
    
    
    479
    
    
    
    440
 Discontinued operations
  Fiscal year ended June 30,2008
    
    2007
    
    2006(in $ millions, except per ounce amounts)Total cost of sales from discontinued operations  under IFRS
    
    
    237
    
    
    
    418
    
    
    
    300Depreciation and amortization expense
    
    
    (7
    )
    
    
    (57
    )
    
    
    (35
    )(Provision)/reversal of provision for rehabilitation costs
    
    
    (1
    )
    
    
    (5
    )
    
    
    (1
    )Care and maintenance costs of restructured shafts
    
    
    
    
    
    
    (1
    )
    
    
    (6
    )Employment termination and restructuring costs
    
    
    (4
    )
    
    
    
    
    
    
    1Share-based payments
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )(Impairment)/reversal of impairment of assets
    
    
    5
    
    
    
    (56
    )
    
    
    Total cash costs from discontinued operations  using Gold
Institute guidance
    
    
    230
    
    
    
    298
    
    
    
    258Per ounce calculation:Ounces sold
    
    
    398,249
    
    
    
    587,127
    
    
    
    616,974Total cash cost per ounce from discontinued operations 
using Gold Institute guidance
    
    
    576
    
    
    
    507
    
    
    
    418
 94




---



##### Table of Contents



Total Harmony  Continuing and discontinued operations
 Fiscal year ended June 30,2008
    
    2007
    
    2006(in $ millions, except per ounce amounts)Total production costs  under IFRS
    
    
    1,359
    
    
    
    1,347
    
    
    
    1,209Depreciation and amortization expense
    
    
    (124
    )
    
    
    (163
    )
    
    
    (173
    )(Provision)/reversal of provision for rehabilitation costs
    
    
    (2
    )
    
    
    1
    
    
    
    2Care and maintenance costs of restructured shafts
    
    
    (10
    )
    
    
    (9
    )
    
    
    (28
    )Employment termination and restructuring costs
    
    
    (33
    )
    
    
    
    
    
    
    13Share-based payments
    
    
    (6
    )
    
    
    (7
    )
    
    
    (16
    )(Impairment)/reversal of impairment of assets
    
    
    (35
    )
    
    
    (37
    )
    
    
    30Provision for post retirement benefits
    
    
    (1
    )
    
    
    2
    
    
    
    (1
    )Total cash costs  using Gold Institute guidance
    
    
    1,148
    
    
    
    1,134
    
    
    
    1,036Per ounce calculation:Ounces sold
    
    
    1,948,776
    
    
    
    2,334,198
    
    
    
    2,386,925Total cash cost per ounce  using Gold Institute guidance
    
    
    589
    
    
    
    486
    
    
    
    436
  Item 4 Information on the Company  Business  Strategy
 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
 95




---



##### Table of Contents



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.
   Royalties
  Costs
    Conops
   96




---



##### Table of Contents



Productivity
  Electricity Supply
  Results of Operations
 Years Ended June 30, 2008 and 2007
 Continuing Operations
 Revenues
      97




---



##### Table of Contents



Cost of sales
  Production costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2008
    
    2007
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    Costs per ounceSOUTH AFRICATshepong
    
    
    273,119
    
    
    
    457
    
    
    
    318,887
    
    
    
    351
    
    
    
    30Phakisa
    
    
    4,212
    
    
    
    558
    
    
    
    
    
    
    
    
    
    
    
    Bambanani
    
    
    158,985
    
    
    
    641
    
    
    
    197,060
    
    
    
    586
    
    
    
    9Doornkop
    
    
    44,143
    
    
    
    703
    
    
    
    57,364
    
    
    
    439
    
    
    
    60Elandsrand
    
    
    158,631
    
    
    
    652
    
    
    
    194,710
    
    
    
    527
    
    
    
    24Target
    
    
    85,006
    
    
    
    605
    
    
    
    142,433
    
    
    
    370
    
    
    
    64Masimong
    
    
    117,575
    
    
    
    745
    
    
    
    147,958
    
    
    
    559
    
    
    
    33Evander operations
    
    
    240,037
    
    
    
    525
    
    
    
    235,443
    
    
    
    481
    
    
    
    9Virginia operations
    
    
    250,324
    
    
    
    719
    
    
    
    266,948
    
    
    
    546
    
    
    
    32Other   underground
    
    
    69,574
    
    
    
    744
    
    
    
    104,507
    
    
    
    488
    
    
    
    52Other  surface
    
    
    148,921
    
    
    
    390
    
    
    
    81,761
    
    
    
    428
    
    
    
    (9
    )INTERNATIONALPNG
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,550,527
    
    
    
    
    
    
    
    1,747,071Weighted average
    
    
    
    
    
    
    591
    
    
    
    
    
    
    
    479
    
    
    
    23
    98




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##### Table of Contents



Depreciation and amortization
  Employment termination and restructuring costs
  Impairment of assets
  Other expenses/income
  Recent Developments
 Loss from associates
  Profit on sale of investment in associate
  99




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##### Table of Contents



Impairment of investment in associate
  Fair value of non-derivative financial instruments
  Loss on sale of listed investments
  Investment income
  Finance costs
 Recent Accounting
Pronouncements
 Income and Mining Taxes
 South Africa.
 STC
 Income and Mining Tax
    
    2008
    
    2007Effective tax rate (expense)/benefit
    
    
    172
    %
    
    
    (25
    )%
  100




---



##### Table of Contents



PNG
     Discontinued Operations
 Revenues
  Costs
  Impairment of assets
  Income and Mining Taxes
 South Africa. Income and Mining Taxes Continuing Operations
  Australia.
  101




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##### Table of Contents



Continuing and discontinued operations
 Net (loss)/profit
  Years Ended June 30, 2007 and 2006
 Continuing Operations
 Revenues
        Cost of sales
  102




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##### Table of Contents



Production costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2007
    
    2006
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    Costs per ounceSOUTH AFRICATshepong
    
    
    318,887
    
    
    
    351
    
    
    
    335,289
    
    
    
    335
    
    
    
    5Phakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Bambanani
    
    
    197,06
    
    
    
    586
    
    
    
    200,739
    
    
    
    502
    
    
    
    17Doornkop
    
    
    57,364
    
    
    
    439
    
    
    
    43,593
    
    
    
    558
    
    
    
    (21
    )Elandsrand
    
    
    194,710
    
    
    
    527
    
    
    
    170,867
    
    
    
    523
    
    
    
    1Target
    
    
    142,433
    
    
    
    370
    
    
    
    150,196
    
    
    
    346
    
    
    
    7Masimong
    
    
    147,958
    
    
    
    559
    
    
    
    136,153
    
    
    
    489
    
    
    
    14Evander operations
    
    
    235,443
    
    
    
    481
    
    
    
    274,439
    
    
    
    403
    
    
    
    19Virginia operations
    
    
    266,948
    
    
    
    546
    
    
    
    276,285
    
    
    
    488
    
    
    
    12Other  Underground
    
    
    104,507
    
    
    
    488
    
    
    
    77,652
    
    
    
    541
    
    
    
    (8
    )Other  Surface
    
    
    81,761
    
    
    
    428
    
    
    
    104,738
    
    
    
    439
    
    
    
    (3
    )INTERNATIONALPNG
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,747,071
    
    
    
    
    
    
    
    1,769,951Weighted average
    
    
    
    
    
    
    479
    
    
    
    
    
    
    
    440
    
    
    
    9
        103




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##### Table of Contents



Depreciation and Amortization
  Care and Maintenance Cost of Restructured Shafts
  Employment Termination Costs
  Impairment of Assets
  Exploration expenditure
  Other expenses  net
  Loss from Associates
  Profit on Sale of Investment in Associate
  (Loss)/Profit on Sale of Listed Investments
  104




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##### Table of Contents



Investment Income
  Finance costs
  Income and Mining Taxes
 South Africa
  Income and Mining Tax
    
    2007
    
    2006Effective tax rate (expense)/benefit
    
    
    (25
    )%
    
    
    24
    %
  PNG
   105




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##### Table of Contents



Discontinued operations
 Revenue
  Costs
  Impairment of assets
  Taxation
 South Africa Income and mining taxation Continuing Operations
  Australia.
    Continuing and discontinued operations
 Net Profit/(Loss)
  106




---



##### Table of Contents



Recent Accounting Pronouncements
  IFRIC
     107




---



##### Table of Contents



Liquidity and Capital Resources
  Cash Resources
 Fiscal year ended June 30,2008
    
    2007
    
    2006($ in millions)Continuing operationsOperating cash flows
    
    
    165
    
    
    
    176
    
    
    
    38Investing cash flows
    
    
    (313
    )
    
    
    (318
    )
    
    
    (291
    )Financing cash flows
    
    
    78
    
    
    
    132
    
    
    
    8Foreign exchange differences
    
    
    5
    
    
    
    6
    
    
    
    42Total cash flows from continuing operations
    
    
    (65
    )
    
    
    (4
    )
    
    
    (203
    ) 108




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##### Table of Contents



Fiscal year ended June 30,2008
    
    2007
    
    2006($ in millions)Discontinued
operationsOperating cash flows
    
    
    71
    
    
    
    (17
    )
    
    
    17Investing cash flows
    
    
    (16
    )
    
    
    
    
    
    
    41Financing cash flows
    
    
    
    
    
    
    
    
    
    
    (25
    )Foreign exchange differences
    
    
    (7
    )
    
    
    
    
    
    
    (6
    )Total cash flows from discontinued operations
    
    
    48
    
    
    
    (17
    )
    
    
    27 Operations
    Investing
   Financing
   Outstanding Credit Facilities and Other Borrowings
 AVR Nedbank JIBAR
 109




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##### Table of Contents



Recently Retired Credit Facilities and Other Borrowings
   Safex Overnight Rate
 110




---



##### Table of Contents



AHJIC
      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, 2008
    
    July 1, 2009
    
    July 1, 2011
    
    Subsequentto June 30,
    
    to June 30,
    
    To June 30,
    
    June 30,Total
    
    2009
    
    2011
    
    2013
    
    2013($million)
    
    ($million)
    
    ($million)
    
    ($million)
    
    ($million)Convertible uncollaterized bonds(1)
    
    
    229
    
    
    
    229
    
    
    
    
    
    
    
    
    
    
    
    Africa Vanguard Resources(1)
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    Nedbank  AVR(1)
    
    
    25
    
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    Westpac Bank(1)
    
    
    33
    
    
    
    4
    
    
    
    6
    
    
    
    23
    
    
    
    Nedbank(1)
    
    
    256
    
    
    
    256
    
    
    
    
    
    
    
    
    
    
    
    Post retirement health care(2)
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16Environmental obligations(3)
    
    
    145
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145Total contractual obligations
    
    
    708
    
    
    
    518
    
    
    
    6
    
    
    
    23
    
    
    
    161
 
 (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 2008.(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




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##### Table of Contents



Contractual Obligations off the Balance Sheet
  Capital Expenditure
  $millionAuthorized and contracted for
    
    
    149Authorized but not yet contracted for
    
    
    221Total
    
    
    370
 Commercial Commitments
  Amount of Commitments Expiring by PeriodLessThan 12
    
    12-36
    
    36-60Months
    
    Months
    
    Months
    
    After 60July 1,
    
    July 1,
    
    July 1,
    
    Months2008 to
    
    2009 to
    
    2011 to
    
    SubsequentJune 30,
    
    June 30,
    
    June 30,
    
    to June 30,Total
    
    2009
    
    2011
    
    2013
    
    2013($million)
    
    ($million)
    
    ($million)
    
    ($million)
    
    ($million)Guarantees(1)
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24Capital commitments(2)
    
    
    149
    
    
    
    149
    
    
    
    
    
    
    
    
    
    
    
    Total commitments expiring by period
    
    
    173
    
    
    
    149
    
    
    
    
    
    
    
    
    
    
    
    24
 
 (1)
    
    Amount of Commitments Expiring by Period.(2)
    
    Capital commitments consist only of amounts committed to
external suppliers, although a total of U.S.$380 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
  112




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##### Table of Contents



  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 5. Operating and
Financial Review and Prospects  Liquidity and Capital Resources  Credit Facilities and Other
Borrowings  Outstanding Credit Facilities and Other Borrowings. Item 10.
Description of Ordinary Shares  Memorandum and Articles of Association  Directors  Borrowing
Powers. Item 10. Additional Information  Exchange
Controls and Other Limitations Affecting Security Holders.
 Other Financial Information
 Export Sales
  113




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##### Table of Contents



Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 Directors and Senior Management
  Board of directors
 Name
    
    Date of appointment
    
    Date of resignationPatrice Motsepe (1)
    
    September 23, 2003
    
    By rotation or resignationBernard Swanepoel
    
    May 16, 1995
    
    Resigned on August 6, 2007Frank Abbott (2)
    
    October 1, 1994
    
    By rotation or resignationGraham Briggs
    
    August 6, 2007
    
    By rotation or resignationJoaquim Chissano (1) (3)
    
    April 20, 2005
    
    By rotation or resignationFikile De Buck(1) (3)
    
    March 30, 2006
    
    By rotation or resignationKen Dicks (1) (3)
    
    February 13, 2008
    
    By rotation or resignationCheick Diarra (1) (3)
    
    March 5, 2008
    
    By rotation or resignationDr Simo Lushaba (1) (3)
    
    October 18, 2002
    
    By rotation or resignationCathie Markus (1) (3)
    
    May 1, 2007
    
    By rotation or resignationModise Motloba (1) (3)
    
    July 30, 2004
    
    By rotation or resignationNomfundo Qangule
    
    July 26, 2004
    
    Resigned on August 21, 2007Cedric Savage (1) (3)
    
    September 23, 2003
    
    By rotation or resignationAndré Wilkens (1)
    
    August 6, 2007
    
    By rotation or resignation
 
 (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.(3)
    
    Independent Non-Executive Chairman
 Patrice Motsepe (46) BA (Legal), LLB.
 Executive Directors
 Graham Briggs (55), BSc (Hons) (Geology), PrSciNat  Chief Executive.
 114




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##### Table of Contents



Frank Abbott (53), BCom, CA (SA), MBL  Interim Financial Director.
 Non-Executive Directors
 Joaquim
Chissano (68)  independent non-executive Director.
 Fikile De Buck (48), BA (Economics), FCCA (UK)  Independent non-executive director.
 Dr Cheick Diarra (56), PHD (Mechanical and Aerospace Engineering) Independent non-executive
director.
 Ken Dicks (69), Mine Managers Certificates (Metalliferous and Fiery Coal Mines); Management
Development Diploma and Management Diploma  Independent non-executive director.
 115




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##### Table of Contents



Dr Simo Lushaba (42), Bsc (Hon), MBA and DBA  Independent non-executive director.
 Cathie Markus (51), BA LLB  Independent non-executive director.
 Modise Motloba (42), BSc, Diploma in Strategic Management  Independent non-executive
director.
 Cedric Savage (69), BSc (Eng), MBA, ISMP (Harvard)  Independent non-executive director.
 André Wilkens (58), Mine Managers Certificate of Competency, MDPA, RMIIA, Non-executive
director.
 Management
  Bob Atkinson (56), NHD (Metalliferous Mining).
 116




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##### Table of Contents



Jaco Boshoff (39), BSc (Hons), MSc (Geology), MBA, PrSciNat.
 Johannes van Heerden (35), BCompt (Hons), CA(SA)
 Mashego Mashego (44), BA Ed, BA (Hons), GEDP, JMDP.
 Jackie Mathebula (37), B Admin Honours, MBA, Master of Management (MM, HR).
 Alwyn Pretorius (36), BSc Mining Engineering & BSc Industrial Engineering (UP).
 Marian van der Walt (35), BCom (Law), LLB, Higher Diploma in Tax, Diploma in Corporate
Governance, Diploma in Insolvency Law, Certificate in Business Leadership.
 Tom Smith (52), NHD (Mine Surveying and Metalliferous Mining).
 Abre van Vuuren (48), BComm, MDP, DPLR.
 117




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##### Table of Contents



Board and Management Changes
  Former
Executive Directors
 Bernard Swanepoel (46), BSc (Mining Engineering), BCom (Hons)
 Nomfundo Qangule (40), BCom, BCom (Hons) CTA, CA (SA), Member of CAIB (SA) and the Financial
Director of Harmony.
 Former
Management
 Boetie Swanepoel (47), BCompt (Hons), CA(SA).
 Board Practices
     Executive
Management Committee
   Graham Briggs
    
    Chief ExecutiveFrank Abbott
    
    Interim Chief Financial Officer
 118




---



##### Table of Contents



Bob Atkinson
    
    ProjectsJaco Boshoff
    
    Ore ReservesMashego Mashego
    
    Human ResourcesJackie Mathebula
    
    Corporate AffairsAlwyn Petorius
    
    Chief Operating Officer (North)Tom Smith
    
    Chief Operating Officer (South)Marian van der Walt
    
    Company Secretary; Legal and Compliance (as from
October 1, 2008, Corporate and Investor Relations)Johannes van Heerden
    
    Chief Executive Officer South East AsiaAbre van Vuuren
    
    Corporate Services
 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
  Purpose and function
   Independence/compliance
   119




---



##### Table of Contents



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
   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)Frank Abbott
    
    Appointed to the committee on July 30, 2004 and resigned
from the committee following his appointment as Interim
Financial Director on August 21, 2007Fikile De Buck
    
    Appointed to the committee on May 3, 2006Cedric Savage
    
    Appointed to the committee on January 26, 2004André Wilkens
    
    Appointed to the committee on August 7, 2007Cathie Markus
    
    Appointed to the committee on October 29, 2007Ken Dicks
    
    Appointed to the committee on February 13, 2008
  120




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##### Table of Contents



Frequency of meetings
  Purpose and function
  Independence/compliance
  Nomination Committee
 Members
   Patrice Motsepe
    
    Chairman; Appointed to the committee on October 24, 2003 as ChairmanJoaquim Chissano
    
    Appointed to the committee on May 3, 2006Frank Abbott
    
    Appointed to the committee August 5, 2005
 Frequency of meetings
  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, 2006
 121




---



##### Table of Contents



Dr. Simo Lushaba
    
    Appointed to the committee on August 5, 2005Patrice Motsepe
    
    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
  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
  122




---



##### Table of Contents



Technical Committee
 Members
   Andre Wilkens
    
    Chairman; Appointed as chairman on February 13, 2008Ken Dicks
    
    Appointed to the committee on February 13, 2008Modise Motloba
    
    Appointed to the committee on February 13, 2008Cedric Savage
    
    Appointed to the committee on February 13, 2008
  Frequency of meetings
  Purpose and function
   Independence/compliance
  Compensation of Directors and Senior Management
  RetirementContributionsDirectors
    
    Salaries and
    
    during
    
    Bonusesfee (1)
    
    Benefits
    
    the year
    
    Paid
    
    Total($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Name
    
    2008
    
    2008
    
    2008
    
    2008
    
    2008Non-executivePatrice Motsepe
    
    
    87
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87Mr Joaquim Chissano
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Ms Fikile de Buck
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33Mr. Ken Dicks
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11Mr. Cheick Diarra (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr Simo Lushaba
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Cathie Markus
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26Modise Motloba
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44Cedric Savage
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46Andre Wilkens
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31
 123




---



##### Table of Contents



RetirementContributionsDirectors
    
    Salaries and
    
    during
    
    Bonusesfee (1)
    
    Benefits
    
    the year
    
    Paid
    
    Total($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Name
    
    2008
    
    2008
    
    2008
    
    2008
    
    2008ExecutiveNomfundo Qangule (2)
    
    
    
    
    
    
    
    
    
    
    254
    
    
    
    
    
    
    
    254Bernard Swanepoel (3)
    
    
    
    
    
    
    
    
    
    
    265
    
    
    
    83
    
    
    
    348Frank Abbott (4)
    
    
    
    
    
    
    199
    
    
    
    30
    
    
    
    
    
    
    
    229Graham Briggs (5)
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    219
    
    
    
    574TOTAL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,755
 
 (1)
    
    Dr Cheick Diarra has waived his directors fees.(2)
    
    Nomfundo Qangule resigned as Financial Director on August 21, 2007(3)
    
    Bernard Swanepoel resigned as Chief Executive Officer on August 1, 2007(4)
    
    Repayment of a portion of Frank Abbotts salary to ARM Limited(5)
    
    Graham Briggs was appointed Acting Chief Executive Officer on 6 August
2007 and Chief Executive Officer on January 1, 2008 Directors Terms of Employment
      124




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##### Table of Contents



Annual FeeBoard
    
    R118,000 annuallyAudit Committee
    
    R48,000 annuallyEmpowerment Committee
    
    R32,000 annuallyInvestment Committee
    
    R32,000 annuallyNomination Committee
    
    R32,000 annuallyRemuneration Committee
    
    R32,000 annuallySustainable Development Committee
    
    R43,000 annuallyTechnical Committee
    
    R60,000 annuallyChairman of Board
    
    R530,000 (4.5 times the individual directors fee) annuallyChairman 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)
    
    DatesDirectors (total)
    
    
    91,938
    
    
    
    48.55
    
    
    
    2012-2015Senior Management (as a group)
    
    
    583,403
    
    
    
    54.00
    
    
    
    2012-2015Total
    
    
    675,341
    
    
    
    53.26
    
    
    
    2012-2015
  Shares issued in terms of the Harmony 2006 Share Plan
  PSDirectors and
    
    Share Appreciation
    
    
    
    
    
    Performance Shares
    
    Price
    
    ExpirationSenior Management
    
    Rights (SAR)
    
    SAR Price (R)
    
    (PS)
    
    (R)
    
    DatesFrank Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Graham Briggs
    
    
    209,111
    
    
    
    78.18
    
    
    
    66,163
    
    
    
    n/a
    
    
    
    2013/2014Senior Management
(as a group)
    
    
    542,013
    
    
    
    72.33
    
    
    
    219,546
    
    
    
    n/a
    
    
    
    2013/2014
 Share Ownership
  125




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##### Table of Contents



OrdinaryOrdinary
    
    
    
    
    
    SharesShares Number
    
    
    
    
    
    Number as atas at
    
    
    
    
    
    NovemberHolder
    
    June 30, 2008
    
    Percentage
    
    28, 2008
    
    PercentageNon-executive chairmanP. Motsepe
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Directors Non-executiveJ. Chissano
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    F De Buck
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ken Dick
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cheick Diarra
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. S. Lushaba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C. Markus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    M. Motloba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C. Savage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    A. Wilkens
    
    
    203,000
    
    
    
    
    (1)
    
    
    203,000
    
    
    
    
    (1)Executive Directors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    G. Briggs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    F. Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Directors (12 persons)
    
    
    203,000
    
    
    
    
    
    
    
    203,000
    
    
    
    
 
 (1)
    
    Less than 1%. Employees
 General
  Harmony Employees at
    
    Outside Contractors atJune 30,
    
    June 30,2008
    
    2007
    
    2006
    
    2008
    
    2007
    
    2006South Africa
    
    
    40,751
    
    
    
    47,600
    
    
    
    43,283
    
    
    
    6,309
    
    
    
    9,075
    
    
    
    5,287International
    
    
    862
    
    
    
    516
    
    
    
    237
    
    
    
    846
    
    
    
    350
    
    
    
    73Grand total
    
    
    41,543
    
    
    
    48,325
    
    
    
    43,724
    
    
    
    7,155
    
    
    
    9,851
    
    
    
    5,776
  South Africa
  Unionized Labor
   
    
    minimum conditions of employment (note there is no prescribed basic minimum wage);
    
    trade union access and membership;
 126




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##### Table of Contents




    
    training and development;
    
    mandatory compensation in the event of termination for operational reasons;
    
    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
    
    
    77
    %  Solidarity
    
    
    2
    %  UASA
    
    
    9
    %  Collective Bargaining Fund
    
    
    4
    %  Other
    
    
    1
    %  Un-unionised
    
    
    7
    %
      127




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##### Table of Contents




    
    establish whether Conops has been successfully implemented at the
mines where it was introduced and to what extent the original
objective of improved profitability without compromising safety was
met;
    
    understand the gap that exists between the current performance of the
operations and the potential performance after implementation of
Conops at these operations; and
    
    understand the reasons for the underperformance versus the Conops
potential and propose actions to the operations to close the gap.
  Work Stoppages
      Australia
  PNG
   Long Term Incentive Schemes
  Existing share option schemes
  128




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##### Table of Contents



Broad-Based Employee Scheme
  The Harmony 2006 Share Plan
     inter alia
 Annual incentive scheme
   129




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##### Table of Contents



Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Major Shareholders
   Related Party Transactions.
  Number ofHolder
    
    Shares
    
    Percentage1. Allan Gray
    
    
    74,729,579
    
    
    
    18.60
    %2. ARM Ltd. (2)
    
    
    63,632,922
    
    
    
    15.84
    %3. Blackrock Investment Management (UK) Ltd.
    
    
    33,069,140
    
    
    
    8.231
    %4. Orbis Investment Management Ltd. (3)
    
    
    21,029,121
    
    
    
    5.23
    %
 
 (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.(3)
    
    Depository with respect to our International Depository Shares.   Related Party Transactions
     BEE Trust
 130




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##### Table of Contents



Village
 INTERESTS OF EXPERTS AND COUNSEL
  131




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##### Table of Contents



Item 8. FINANCIAL INFORMATION
 CONSOLIDATED STATEMENTS
 Item 18. Financial Statements
 Legal Proceedings
  Class Actions
  Dividends and Dividend Policy
   Recent Developments
 Hidden Valley joint venture partnership
   Sale of Mount Magnet
   132




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##### Table of Contents



Village Main Reef
 To The Point
 Rand
Uranium
    133




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##### Table of Contents



Item 9. THE OFFER AND LISTING
 MARKETS
 Stock Exchange Listings and Ticker Codes
  JSE Limited
    
    HARNew York Stock Exchange
    
    HMYNASDAQ
    
    HMYLondon Stock Exchange
    
    HRMEuronext Brussels
    
    HGEuronext Paris
    
    HMYBerlin Stock Exchange
    
    HAM1
 OFFERING AND LISTING DETAILS
  Harmony OrdinaryShares(Rand per OrdinaryShare)High
    
    LowFiscal year ended June 30, 2006First Quarter
    
    
    71.99
    
    
    
    46.62Second Quarter
    
    
    88.35
    
    
    
    65.50Third Quarter
    
    
    117.05
    
    
    
    76.00Fourth Quarter
    
    
    114.21
    
    
    
    80.51Full Year
    
    
    117.05
    
    
    
    46.62Fiscal year ended June 30, 2007First Quarter
    
    
    121.54
    
    
    
    86.10Second Quarter
    
    
    123.00
    
    
    
    101.00Third Quarter
    
    
    113.45
    
    
    
    90.85Fourth Quarter
    
    
    117.85
    
    
    
    94.30Full Year
    
    
    123.00
    
    
    
    86.10Fiscal 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
    
    
    
    60.00Month ofJuly 2008
    
    
    99.00
    
    
    
    75.10August 2008
    
    
    80.49
    
    
    
    56.45September 2008
    
    
    87.78
    
    
    
    52.10As of
October 21, 2008
    
    
    92.74
    
    
    
    88.00
   134




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##### Table of Contents



NYSE
    
    NASDAQHarmony ADRs
    
    Harmony ADRs($ per ADR)
    
    ($ per ADR)High
    
    Low
    
    High
    
    LowFiscal year ended June 30, 2006First Quarter
    
    
    11.23
    
    
    
    7.21
    
    
    
    11.06
    
    
    
    7.20Second Quarter
    
    
    13.64
    
    
    
    9.71
    
    
    
    13.64
    
    
    
    9.71Third Quarter
    
    
    18.84
    
    
    
    12.25
    
    
    
    18.84
    
    
    
    12.25Fourth Quarter
    
    
    17.76
    
    
    
    11.90
    
    
    
    17.76
    
    
    
    11.90Full Year
    
    
    18.84
    
    
    
    7.21
    
    
    
    18.84
    
    
    
    7.21Fiscal year ended June 30, 2007First Quarter
    
    
    17.10
    
    
    
    11.91
    
    
    
    17.10
    
    
    
    11.91Second Quarter
    
    
    17.26
    
    
    
    12.81
    
    
    
    17.26
    
    
    
    12.81Third Quarter
    
    
    15.97
    
    
    
    12.80
    
    
    
    15.97
    
    
    
    12.80Fourth Quarter
    
    
    16.70
    
    
    
    13.15
    
    
    
    16.70
    
    
    
    13.15Full Year
    
    
    16.76
    
    
    
    12.67
    
    
    
    16.76
    
    
    
    12.67Fiscal 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
    
    
    
    8.74Month ofJuly 2008
    
    
    12.65
    
    
    
    10.26
    
    
    
    12.70
    
    
    
    10.76August 2008
    
    
    10.67
    
    
    
    7.22
    
    
    
    10.22
    
    
    
    7.22September 2008
    
    
    10.74
    
    
    
    6.38
    
    
    
    10.77
    
    
    
    6.39As of
October 21, 2008
    
    
    10.43
    
    
    
    9.82
    
    
    
    10.43
    
    
    
    9.80
   THE SECURITIES EXCHANGE IN SOUTH AFRICA
    History
   135




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th
  STRATE Settlement
  PLAN OF DISTRIBUTION
  SELLING SHAREHOLDERS
  DILUTION
  EXPENSES OF THE ISSUE
  136




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##### Table of Contents



Item 10. ADDITIONAL INFORMATION
 SHARE CAPITAL
  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;
 137




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
    
    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;
 
    
    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
   138




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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
        139




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Voting Rights
  Distribution of Assets on Liquidation
  Redemption/Purchase of Shares
     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
 140




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##### Table of Contents




    
    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
   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;
 141




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##### Table of Contents




    
    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.
  
    
    reduce our issued share capital;
    
    reduce our stated capital; or
    
    reduce our capital redemption reserve fund and share premium account.
 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;
 142




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##### Table of Contents




    
    the appointment of auditors; and
    
    any business arising from the annual financial statements considered at the meeting.
  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
  143




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##### Table of Contents



Register of Members
   
    
    the names and address of the members;
    
    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




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Government Regulatory Considerations
 Shares
   Loans
   Investments
  Dividends
    145




---



##### Table of Contents



CERTAIN SOUTH AFRICAN TAX CONSIDERATIONS
 Treaty
 Dividends
 STC
  Capital Gains Tax
 CGT
 Security Transfer Tax
 STT
    146




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##### Table of Contents



Capitalization
Shares
  Voting Rights
  CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
     ADSs
  Taxation of Dividends
   Capital Gains
    147




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##### Table of Contents



transfer or withdrawal of ordinary shares as
described under  Certain South African Tax Considerations  Security Transfer Tax
 Non-U.S. Holders
  U.S. Information Reporting and Backup Withholding Rules
  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 and warrants, including the applicability and effect
of any state, local or foreign laws, and proposed changes in applicable laws.
 DIVIDENDS AND PAYING AGENTS
  STATEMENTS BY EXPERTS
  DOCUMENTS ON DISPLAY
  
 www.sec.gov.
 SUBSIDIARY INFORMATION
  148




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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.
  149




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##### Table of Contents



Commodity Sales Agreements
  Commodity Hedging Experience
   Foreign Currency Sensitivity
    Sensitivity Analysis
  Interest Rate Sensitivity
  Sensitivity analysis
  June 30,2008
    
    2007($ in millions)Increase in 100 basis points
    
    
    3
    
    
    
    16Decrease in 100 basis points
    
    
    (3
    )
    
    
    (16
    )
   150




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##### Table of Contents



Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  151




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##### Table of Contents



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:
 Call option:
 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:
 Electro-winning:
 Elution:
 Exploration:
 Fabricated gold:
 152




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##### Table of Contents



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:
 Mark-to-market:
 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:
 153




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##### Table of Contents



Milling/mill:
 Mineable:
 Mineralization:
 Mineralized material:
 Morphology:
 Open-pit/Open cast/Open cut:
 Ore:
 Ore grade:
 Ore reserves:
 
    
    development of additional reserves;
    
    depletion of existing reserves through production;
    
    actual mining experience; and
    
    price forecasts.
  Orebody:
 Ounce:
 Overburden:
 Overburden tons:
 Palaeotopography:
 Pay limit:
 Placer:
 Precipitate:
 Probable reserves:
 Prospect:
 Prospecting license:
 Proven reserves:
 154




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##### Table of Contents



Put option:
 Pyrite:
 Quartz:
 Recovery grade:
 Reef:
 Refining:
 Rehabilitation:
 Sampling:
 Shaft:
 Slimes:
 Slurry:
 Smelting:
 Spot price:
 Stockpile:
 Stockwork:
 Stope:
 Stripping:
 Sulphide:
 Syncline:
 Tailings:
 Ton:
 Tonnage:
 Tonne:
 Trend:
 Unconformity:
 Waste:
 Waste rock:
 Yield:
 Zinc precipitation:
 155




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##### Table of Contents



PART II
 
 Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  156




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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
  157




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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
  158




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##### Table of Contents



(d) Changes in Internal Control over Financial Reporting
    
    
    failure to maintain an effective information technology control environment;
    
    failure to maintain effective preventative and detective monitoring
controls over the accuracy of depreciation expense on mining assets under
construction;
    
    failure to maintain effective preventative and detective monitoring
controls over the completeness of capitalised borrowing costs on qualifying
assets;
    
    failure to maintain effective preventative and detective monitoring
controls over the completeness and accuracy of the reconciliation of stores
inventory; and
    
    failure to maintain effective preventative and detective monitoring
controls over the reconciliation of certain adjustments to deferred tax.
  
    
    the appointment of senior financial personnel to expand the capacity
of the financial departments and strengthen the overall governance
structure of the company;
    
    the reimplementation of Enterprise Resource Planning (ERP) system.
In connection the reimplementation, we:
 
    
    appointed a System Implementation Partner to assist with the
reimplementation of the ERP system;
    
    implemented rigorous project and resource planning, testing
strategies, user training, communication management and change
management during the life cycle of the ERP system reimplementation;
    
    implemented a detail governance structure and process during
the life cycle of the ERP system implementation, which included the
Internal Audit activities. We also established an ERP Management
Committee and Project Steering Committee to monitor the ERP
reimplementation;
    
    designed and implemented change and access control procedures
that apply to all systems, including any configuration changes to ERP.
This includes a Change Advisory Panel which is responsible to oversee,
monitor and approve all changes made to the system;
 
    
    implemented manual controls during the ERP reimplementation process to
ensure reliable and accurate financial information was produced;
    
    the implementation and strengthening of manual quarterly preventative
and detective monitoring controls to mitigate the risk of material
misstatement in the financial records;
    
    the implementation of preventative and detective monitoring controls
over the accuracy of depreciation expense on mining assets, and the
completeness of borrowing costs capitalized, including management
reviews on a quarterly basis;
    
    the controls over stores inventory were improved, including regular
cycle counts and manual reconciliations; and
 159




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
    
    the implementation of a manual control whereby the deferred tax
balance is reconciled on a quarterly basis to ensure the accuracy and
completeness of deferred tax and the validity of prior year entries
still included in the deferred tax balance.
  160




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Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  Item 7. Directors and
Management  Board Practices  Audit Committee.
 
 Item 16B. CODE OF ETHICS
  161




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##### Table of Contents



Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 AUDIT FEES
  Fiscal year ended June 30, 2007
    
    U.S.$1.343 millionFiscal year ended June 30, 2008
    
    U.S.$1.949 million
 AUDIT-RELATED FEES
  Fiscal year ended June 30, 2007
    
    U.S.$0.451 millionFiscal year ended June 30, 2008
    
    U.S.$0.316 million
  TAX FEES
  Fiscal year ended June 30, 2007
    
    U.S.$0.168 millionFiscal year ended June 30, 2008
    
    U.S.$0.052 million
  ALL OTHER FEES
  Fiscal year ended June 30, 2007
    
    
    Fiscal year ended June 30, 2008
    
    
    
 AUDIT COMMITTEE APPROVAL
  162




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##### Table of Contents



Item 16D. EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES
  163




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##### Table of Contents



Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  164




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PART III
 
 Item 17. FINANCIAL STATEMENTS
  165




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##### Table of Contents



Item 18. FINANCIAL STATEMENTS
 Financial Statements
  166




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##### Table of Contents



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 September 25, 2007 in respect of the Annual General
Meeting held on November 26, 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).2.2
    
    Share Exchange Agreement between Avmin and Harmony to acquire the shareholding in
Avgold dated February 16, 2004 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30, 2004, as amended, filed on
October 14, 2004).2.3
    
    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).2.4
    
    Form of ADR (included in Exhibit 2.3).2.5
    
    Form of Harmonys senior unsecured 13% bonds due June 14, 2006 (incorporated by
reference to Harmonys Annual Report on Form 20-F for the fiscal year ended
June 30, 2001 filed on September 26, 2001).2.6
    
    Form of Global Bond (incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2004, as amended, filed on
October 14, 2004).2.7
    
    Bond Offering Circular dated October 14, 2004 (incorporated by reference to
Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).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
    
    Sale of Shares Agreement amongst Harmony, ARMgold Harmony Joint Investment
Company (Proprietary) Limited, and The ARM Broad-Based Empowerment Trust signed
on April 15, 2005 (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).4.4
    
    Subordination Agreement amongst Harmony, Nedbank Limited and The ARM Broad-Based
Empowerment Trust signed on April 15, 2005 (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).4.5
    
    First Loan Agreement between Nedbank Limited and The ARM Broad-Based Empowerment
Trust signed on April 15, 2005 (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).4.6
    
    First Ranking Cessation and Pledge between The ARM Broad-Based Empowerment Trust
and Nedbank Limited signed on April 15, 2005 (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).4.7
    
    Second Loan Agreement between Nedbank Limited and The ARM Broad-Based Empowerment
Trust signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the
 167




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##### Table of Contents



fiscal year ended June 30, 2005, filed on November 3,
2005).
 4.8
    
    Second Ranking Cessation and Pledge between The ARM Broad-Based Empowerment Trust
and Nedbank Limited signed on April 15, 2005 (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).4.9
    
    Flow of Funds Agreement amongst Nedbank Limited, ARMgold Harmony Joint Investment
Company (Proprietary) Limited, Harmony and The ARM Broad-Based Empowerment Trust
signed on April 15, 2005 (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).4.10
    
    Right of Pre-emption and Deed of Adherence between Nedbank Limited, Harmony,
African Rainbow Minerals & Exploration Investments (Proprietary) Limited and
ARMgold Harmony Joint Investment Company (Proprietary) Limited signed on
April 15, 2005 (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).4.11
    
    Agreement of Assignment between African Rainbow Minerals & Exploration
Investments (Proprietary) Limited, Harmony, ARMgold Harmony Joint Investment
Company (Proprietary) Limited and The Trustees of The ARM Broad-Based Empowerment
Trust signed on April 15, 2005 (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).4.12
    
    Harmony Option Agreement between Harmony and Nedbank Limited signed on April 15,
2005 (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).4.13
    
    Harmony Undertaking amongst Harmony, ARMgold Harmony Joint Investment Company
(Proprietary) Limited and Nedbank Limited signed on April 15, 2005 (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).4.14
    
    Term Loan Agreement with Rand Merchant Bank dated March 9, 2006 (incorporated by
reference to Harmonys Annual Report on Form 20-F for the fiscal year ended
June 30, 2006, filed on October 31, 2006).4.15
    
    Pledge Agreement in favor of FirstRand Bank Limited (acting through its Rand
Merchant Bank division) dated March 9, 2006 (incorporated by reference to
Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2006,
filed on October 31, 2006).4.16
    
    Senior Facility Agreement among Nedbank Limited and Harmony Gold Mining Company
Limited and the Guarantors named therein dated on or about September 28, 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).4.17
    
    Cessation and Pledge in Security by African Rainbow Minerals Gold Limited in
favour of Nedbank dated on or about September 28, 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).4.18
    
    Cessation and Pledge in Security by Harmony Gold Mining Company Limited in favour
of Nedbank dated on or about September 28, 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).4.19
    
    Preference Share Subscription Agreement dated March 20, 2007 by and among
FirstRand Bank Limited (RMB), Harmony and the subsidiaries named therein
(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).4.20
    
    Senior Bridge Loan Facility with RMB dated June 29, 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).4.21
    
    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).
 168




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*4.22
    
    Sale Agreement with Randfontein Estates Limited, Clidet No.
726 (Proprietary) Limited and Clidet No. 770 (Proprietary) Limited dated December 18, 2007.*4.23
    
    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.*4.24
    
    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.*4.25
    
    Deed of Extinguishment of Royalty (Hidden Valley Project) dated May June 11, 2008.*4.26
    
    Senior Facility Agreement with Nedbank Limited dated
September 28, 2007.*4.27
    
    Master Lease Facility Agreement between Morobe Consolidated
Goldfields Limited and Westpac Bank PNG Limited (Hidden Valley
Project) dated June 14, 2007.8.1
    
    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, 2005, filed on November 3, 2005).*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




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##### Table of Contents



SIGNATURE
  HARMONY GOLD MINING COMPANY LIMITED
 By:
    
    /s/ Graham BriggsGraham BriggsChief Executive OfficerDate: October 29, 2008
 170




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##### Table of Contents



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,
2008, 2007 and 2006
    
    
    F-3Consolidated
Statements of Other Comprehensive Income for the years ended June 30,
2008, 2007 and 2006
    
    
    F-4Consolidated Balance Sheets at June 30, 2008 and 2007
    
    
    F-5Consolidated Statements of Changes in Shareholders Equity for
the years ended June 30, 2008, 2007 and 2006
    
    
    F-6Consolidated Statements of Cash Flows for the years ended
June 30, 2008, 2007 and 2006
    
    
    F-7Notes to the Consolidated Financial Statements
    
    
    F-8
 F-1




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##### Table of Contents



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




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##### Table of Contents



Consolidated income statements
 U.S. DollarFigures in million
    
    Notes
    
    2008
    
    
    2007
    
    
    2006Continuing operationsRevenue
    
    
    
    
    
    
    1,269
    
    
    
    1,116
    
    
    
    937Cost of sales
    
    
    5
    
    
    
    (1,122
    )
    
    
    (929
    )
    
    
    (909
    )Production costs
    
    
    
    
    
    
    (918
    )
    
    
    (836
    )
    
    
    (778
    )Amortization and depreciation
    
    
    
    
    
    
    (117
    )
    
    
    (106
    )
    
    
    (138
    )Impairment of assets
    
    
    
    
    
    
    (40
    )
    
    
    19
    
    
    
    30Employment termination and restructuring costs
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    12Other items
    
    
    
    
    
    
    (18
    )
    
    
    (6
    )
    
    
    (35
    )Gross profit
    
    
    
    
    
    
    147
    
    
    
    187
    
    
    
    28Corporate, administration and other expenditure
    
    
    
    
    
    
    (31
    )
    
    
    (31
    )
    
    
    (24
    )Exploration expenditure
    
    
    
    
    
    
    (28
    )
    
    
    (27
    )
    
    
    (11
    )Other (expenses)/income  net
    
    
    6
    
    
    
    (15
    )
    
    
    25
    
    
    
    (97
    )Operating profit
    
    
    7
    
    
    
    73
    
    
    
    154
    
    
    
    (104
    )Loss from associates
    
    
    20
    
    
    
    (11
    )
    
    
    (3
    )
    
    
    (17
    )Profit on sale of investment in associate
    
    
    8
    
    
    
    
    
    
    
    33
    
    
    
    Impairment of investment in associate
    
    
    20
    
    
    
    (12
    )
    
    
    
    
    
    
    Profit on sale of investment in subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Fair value of non-derivative financial instruments
    
    
    9
    
    
    
    5
    
    
    
    15
    
    
    
    14(Loss)/profit on sale of listed investments
    
    
    10
    
    
    
    (63
    )
    
    
    (5
    )
    
    
    45Investment income
    
    
    11
    
    
    
    39
    
    
    
    27
    
    
    
    31Finance cost
    
    
    12
    
    
    
    (70
    )
    
    
    (65
    )
    
    
    (62
    )(Loss)/profit before taxation
    
    
    
    
    
    
    (39
    )
    
    
    156
    
    
    
    (91
    )Taxation
    
    
    13
    
    
    
    (65
    )
    
    
    (39
    )
    
    
    (22
    )Net (loss)/profit from continuing operations
    
    
    
    
    
    
    (104
    )
    
    
    117
    
    
    
    (113
    )Discontinued operationsProfit/(loss) from discontinued operations
    
    
    14
    
    
    
    74
    
    
    
    (66
    )
    
    
    22Net (loss)/profit
    
    
    
    
    
    
    (30
    )
    
    
    51
    
    
    
    (91
    )(Loss)/earnings per ordinary share (cents):
    
    
    15(Loss)/profit from continuing operations
    
    
    
    
    
    
    (26
    )
    
    
    29
    
    
    
    (29
    )Profit/(loss) from discontinued operations
    
    
    
    
    
    
    18
    
    
    
    (17
    )
    
    
    6Total (loss)/profit for the period
    
    
    
    
    
    
    (8
    )
    
    
    12
    
    
    
    (23
    )Diluted (loss)/earnings per ordinary share
(cents):
    
    
    15(Loss)/profit from continuing operations
    
    
    
    
    
    
    (26
    )
    
    
    29
    
    
    
    (29
    )Profit/(loss) from discontinued operations
    
    
    
    
    
    
    18
    
    
    
    (17
    )
    
    
    6Total (loss)/profit for the period
    
    
    
    
    
    
    (8
    )
    
    
    12
    
    
    
    (23
    )
  F-3




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Consolidated
statements of other comprehensive income
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Net (loss)/profit for the period
    
    
    (30
    )
    
    
    51
    
    
    
    (91
    )Attributable to:Owners of the parent
    
    
    (30
    )
    
    
    51
    
    
    
    (91
    )Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    Other comprehensive (loss)/income for the
period, net of income tax
    
    
    (204
    )
    
    
    41
    
    
    
    (196
    )Foreign exchange translation profit and loss
    
    
    (246
    )
    
    
    87
    
    
    
    (214
    )Mark-to-market of available-for-sale investments
    
    
    42
    
    
    
    (46
    )
    
    
    18Total comprehensive (loss)/income for the period
    
    
    (234
    )
    
    
    92
    
    
    
    (287
    )Attributable to:Owners of the parent
    
    
    (234
    )
    
    
    92
    
    
    
    (287
    )Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
  F-4




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##### Table of Contents



Consolidated
balance sheets
 US DollarFigures in million
    
    Notes
    
    2008
    
    
    2007AssetsNon-current assetsProperty, plant and equipment
    
    
    16
    
    
    
    3,531
    
    
    
    3,484Intangible assets
    
    
    17
    
    
    
    283
    
    
    
    328Restricted cash
    
    
    24
    
    
    
    10
    
    
    
    1Restricted investments
    
    
    18
    
    
    
    188
    
    
    
    195Investments in financial assets
    
    
    19
    
    
    
    9
    
    
    
    8Investments in associates
    
    
    20
    
    
    
    19
    
    
    
    1Deferred tax asset
    
    
    13
    
    
    
    190
    
    
    
    216Trade and other receivables
    
    
    22
    
    
    
    18
    
    
    
    8Total non-current assets
    
    
    
    
    
    
    4,248
    
    
    
    4,241Current assetsInventories
    
    
    23
    
    
    
    89
    
    
    
    105Investments in financial assets
    
    
    19
    
    
    
    
    
    
    
    353Trade and other receivables
    
    
    22
    
    
    
    112
    
    
    
    130Income and mining taxes
    
    
    
    
    
    
    11
    
    
    
    9Restricted cash
    
    
    24
    
    
    
    
    
    
    
    39Cash and cash equivalents
    
    
    25
    
    
    
    53
    
    
    
    101265
    
    
    
    737Non-current assets classified as held for sale
    
    
    14
    
    
    
    197
    
    
    
    182Total current assets
    
    
    
    
    
    
    462
    
    
    
    919Total assets
    
    
    
    
    
    
    4,710
    
    
    
    5,160Equity and liabilitiesShare capital and reservesShare capital
    
    
    26
    
    
    
    3,787
    
    
    
    3,752Other reserves
    
    
    27
    
    
    
    (196
    )
    
    
    2Accumulated loss
    
    
    
    
    
    
    (419
    )
    
    
    (388
    )Total equity
    
    
    
    
    
    
    3,172
    
    
    
    3,366Non-current liabilitiesBorrowings
    
    
    28
    
    
    
    31
    
    
    
    248Deferred tax
    
    
    13
    
    
    
    573
    
    
    
    602Provision for environmental rehabilitation
    
    
    29
    
    
    
    145
    
    
    
    156Provisions for other liabilities and charges
    
    
    30
    
    
    
    18
    
    
    
    18Total non-current liabilities
    
    
    
    
    
    
    767
    
    
    
    1,024Current liabilitiesTrade and other payables
    
    
    31
    
    
    
    213
    
    
    
    257Borrowings
    
    
    28
    
    
    
    494
    
    
    
    405Bank overdraft
    
    
    25
    
    
    
    
    
    
    
    31707
    
    
    
    693Liabilities directly associated with
non-current assets classified as held for sale
    
    
    14
    
    
    
    64
    
    
    
    77Total current liabilities
    
    
    
    
    
    
    771
    
    
    
    770Total equity and liabilities
    
    
    
    
    
    
    4,710
    
    
    
    5,160
  F-5




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##### Table of Contents



Consolidated statements of changes in shareholders equity
 
 Number ofordinary
    
    
    
    
    
    
    
    Share
    
    
    Accumulated
    
    
    Othershares issued
    
    
    
    Share capital
    
    
    premium
    
    
    loss
    
    
    reserves
    
    
    TotalFigures in million (US Dollar)Notes
    
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    27Balance  June 30, 2005 (as previously
reported)
    
    
    
    393,341,194
    
    
    
    
    31
    
    
    
    3,669
    
    
    
    (352
    )
    
    
    135
    
    
    
    3,483Change in accounting policy for the
capitalization of interest on assets
under construction (note 2.1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Balance  June 30, 2005 (restated)
    
    
    
    393,341,194
    
    
    
    
    31
    
    
    
    3,669
    
    
    
    (346
    )
    
    
    135
    
    
    
    3,489Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Issue of shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    - Exercise of employee share options
    
    
    
    3,593,256
    
    
    
    
    1
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    29Deferred share-based payments
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    16
    
    
    
    19Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91
    )
    
    
    (196
    )
    
    
    (287
    )Balance  June 30, 2006
    
    
    
    396,934,450
    
    
    
    
    32
    
    
    
    3,700
    
    
    
    (438
    )
    
    
    (45
    )
    
    
    3,249Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Issue of shares- Exercise of employee share options
    
    
    
    2,673,934
    
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    19Deferred share-based payments
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    6
    
    
    
    7Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51
    
    
    
    41
    
    
    
    92Balance  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
    
    
    
    
    
    
    
    
    
    
    
    20Deferred share-based payments
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    6
    
    
    
    9Total comprehensive income for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    (204
    )
    
    
    (234
    )Balance  June 30, 2008
    
    
    
    403,253,756
    
    
    
    
    32
    
    
    
    3,755
    
    
    
    (419
    )
    
    
    (196
    )
    
    
    3,172
  F-6




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Consolidated cash flow statements
 
 US DollarFigures in million
    
    Notes
    
    2008
    
    
    2007
    
    
    2006Cash flow from operating activitiesCash generated by operations
    
    
    32
    
    
    
    268
    
    
    
    164
    
    
    
    53Interest received
    
    
    
    
    
    
    38
    
    
    
    25
    
    
    
    33Dividends received
    
    
    
    
    
    
    5
    
    
    
    3
    
    
    
    3Interest paid
    
    
    
    
    
    
    (57
    )
    
    
    (31
    )
    
    
    (32
    )Income and mining taxes paid
    
    
    
    
    
    
    (18
    )
    
    
    (2
    )
    
    
    (2
    )Cash generated by operating activities
    
    
    
    
    
    
    236
    
    
    
    159
    
    
    
    55Cash flow from investing activitiesAmounts invested in restricted investments
    
    
    
    
    
    
    (11
    )
    
    
    (2
    )
    
    
    (5
    )Decrease/(increase) in restricted cash
    
    
    
    
    
    
    28
    
    
    
    (4
    )
    
    
    (32
    )Investment in Orpheo by Harmony acquired
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Proceeds on disposal of South Kal Mine
    
    
    32
    
    
    
    18
    
    
    
    
    
    
    
    Proceeds on disposals of Buffalo Creek
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    3Proceeds on disposal of
available-for-sale financial assets
    
    
    
    
    
    
    184
    
    
    
    55
    
    
    
    365Acquisition of associate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (321
    )Increase in intangible assets
    
    
    
    
    
    
    (3
    )
    
    
    (6
    )
    
    
    (Increase)/decrease in other non-current
investments
    
    
    
    
    
    
    (11
    )
    
    
    (5
    )
    
    
    3Proceeds on disposal of property, plant
and equipment
    
    
    
    
    
    
    18
    
    
    
    27
    
    
    
    13Additions to property, plant and equipment
    
    
    
    
    
    
    (552
    )
    
    
    (383
    )
    
    
    (275
    )Cash utilized by investing activities
    
    
    
    
    
    
    (329
    )
    
    
    (318
    )
    
    
    (250
    )Cash flow from financing activitiesLong-term borrowings raised
    
    
    
    
    
    
    323
    
    
    
    253
    
    
    
    160Long-term borrowings paid
    
    
    
    
    
    
    (256
    )
    
    
    (139
    )
    
    
    (205
    )Ordinary shares issued
    
    
    
    
    
    
    12
    
    
    
    19
    
    
    
    29Dividends paid
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )Cash generated by financing activities
    
    
    
    
    
    
    78
    
    
    
    132
    
    
    
    (17
    )Foreign currency translation adjustments
    
    
    
    
    
    
    (2
    )
    
    
    6
    
    
    
    36Net decrease in cash and equivalents
    
    
    
    
    
    
    (17
    )
    
    
    (21
    )
    
    
    (176
    )Cash and equivalents  beginning of period
    
    
    
    
    
    
    70
    
    
    
    91
    
    
    
    267Cash and equivalents  end of period
    
    
    25
    
    
    
    53
    
    
    
    70
    
    
    
    91
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Notes to the consolidated financial statements
 
 1
    
    General informationHarmony 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. As discussed in note 14, Harmony classified its Australian
operations as non-current assets held for sale. One of these operations were disposed of during the
2008 financial year.The Company is a public company, incorporated and domiciled in South Africa. The address of the
registered office is Randfontein Office Park, Corner Main Reef Road and Ward Avenue, Randfontein,
1759.These consolidated financial statements were authorized for issue by the board of directors on
October 10, 2008.
 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.
IAS 23 (Revised) and IFRS 8 have been retrospectively applied.
 2.1
    
    Basis of preparationThe annual financial statements are prepared on the historical cost basis, as modified by
available-for-sale financial assets, and financial assets and liabilities, which have been brought
to account at fair value. The financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).New accounting standards and interpretationsDuring the current financial year, the following new and revised accounting standards, amendments
to standards and new interpretations were adopted by the Group:IFRS 7  Financial Instruments : DisclosureIn addition, the following new and revised accounting standards and amendments to standards were
early adopted by the Group during the current financial year:IAS 1 (Revised)  Presentation of Financial StatementsIAS 23 (Revised)  Borrowing CostsIFRS 8  Operating SegmentsThe effect of the adoption of these standards and amendments to standards are as follows:IFRS 7  Financial Instruments: DisclosureThe Group adopted this standard as of July 1, 2007. The standard introduces new disclosures to
improve the information regarding financial instruments. It requires the disclosures of qualitative
and quantitative information about the exposure to risks arising from financial instruments,
including a sensitivity analysis to market risk. There was no effect on the financial position or
performance of the Group as a result of the adoption of this standard.IAS 1 (Revised)  Presentation of Financial StatementsThe Group early adopted this amendment as of July 1, 2007. The amendment requires that changes in
equity resulting from transactions with owners (holders of instruments classified as equity) be
presented separately from non-owner changes in equity (also known as other comprehensive income).
There are also additional disclosures for components of other comprehensive income. There was no
effect on the financial position or performance of the Group as a result of the adoption of this
amendment.IAS 23 (Revised)  Borrowing CostsThe Group early adopted the revised standard on Borrowing Costs as of July 1, 2007. The standard
requires that all borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset be capitalized as part of the cost of the asset. All other
borrowing costs are recognized as an expense in the period in which they are incurred.In accordance with the revised standards transitional provisions, the Group designated July 1,
2000 (the earliest commencement date of current qualifying projects) as the effective date and
applied the requirements of the revised standard to all qualifying projects for which the
commencement date of capitalization was on or after that date.
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The impact of the adjustment was as follows:
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Effect on net loss:Decrease in finance cost
    
    
    18
    
    
    
    8
    
    
    
    4Income tax
    
    
    (5
    )
    
    
    (2
    )
    
    
    (1
    )13
    
    
    
    6
    
    
    
    3Effect on Earnings per share (cents):Basic earnings per share
    
    
    3
    
    
    
    2
    
    
    
    1Diluted earnings per share
    
    
    3
    
    
    
    2
    
    
    
    1Effect on opening accumulated loss:Decrease in finance cost
    
    
    
    
    
    
    
    
    
    
    9Income tax
    
    
    
    
    
    
    
    
    
    
    (3
    )Decrease in accumulated loss
    
    
    
    
    
    
    
    
    
    
    6
 The average capitalization rate was 10.6% for 2008 (2007: 6.7%; 2006: 7.3%).IAS 1 (Revised) requires the presentation of a balance sheet as at the beginning of the earliest
comparative period whenever the Group applies an accounting policy retrospectively. Such a balance
sheet has been included in note 38.IFRS 8  Operating SegmentsThe Group early adopted this standard as of July 1, 2007. The standard replaces IAS 14, Segment
Reporting, and aligns segment reporting with the requirements of the US GAAP standard SFAS 131,
Disclosures about segments of an enterprise and related information. The new standard requires a
management approach, under which segment information is presented on the same basis as that used
for internal reporting to the chief operating decision maker.At the date of authorization of these financial statements, the standards, amendments and
interpretations listed below were in issue but not yet effective. These new standards, amendments
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.
 Title
    
    
    
    Effective dateAmendments
    
    IAS 1 (Amendment) and IAS 32 (Amendment)  Puttable Financial Instruments and Obligations arising on Liquidation
    
    ^ Financial year commencing on or after January 1, 2009
    
    IAS 27 (Revised)  Consolidated and Separate Financial Statements
    
    # Financial year commencing on or after July 1, 2009
    
    IAS 27 (Amendment) and IFRS 1 (Amendment)  Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
    
    # Financial year commencing on or after January 1, 2009
    
    IAS 39 (Amendment)  Eligible Hedged items
    
    ^ Financial year commencing on or after July 1, 2009
    
    IFRS 2 (Amendment)  Vesting conditions and cancellations
    
    # Financial year commencing on or after January 1, 2009
    
    IFRS 3 (Revised)  Business Combinations
    
    # Financial year commencing on or after July 1, 2009
    
    Annual improvements to IFRS
    
    # Financial year commencing on or after July 1, 2009New interpretations
    
    IFRIC 14  IAS19 The Limit on a Defined Benefit asset, Minimum Funding Requirements and their interactions
    
    ^ Financial year commencing on or after January 1, 2008
    
    IFRIC 16  Hedges of a Net Investment in a Foreign Operation
    
    ^ Financial year commencing on or after October 1, 2008
 The Group plans to apply the above new standards, amendments and interpretations on their respective effective dates.
 
 #
    
    The impact of the standard/amendment/interpretation is not currently known or reasonably estimable.^
    
    The standard/amendment/interpretation is not expected to have a material impact on the Groups financial statements. F-9




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##### Table of Contents



2.2
    
    ConsolidationThe consolidated financial information includes the financial statements of the Company, its
subsidiaries, its proportionate interest in joint ventures, special purpose entities (SPEs) and
its interests in associates.
 (i)
    
    Subsidiaries, which are those entities in which the Group 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
acquired 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 up, shares issued or liabilities assumed at the date of acquisition
plus costs directly attributable to the acquisition.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 (refer to 2.7).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, other than a subsidiary, in which the Group has a material interest
and in respect of which the Group exercises significant influence over operational and financial
policies, normally owning between 20% and 50% of the voting equity, but which it does not control.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 up, shares issued or liabilities assumed at the date of acquisition 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.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 and may 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 ventures are those entities in which the Group holds a interest and which is jointly
controlled by the Group and one or more 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 results 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.
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(iv)
    
    Special purpose entities (SPEs) 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.
SPEs are consolidated in the same manner as subsidiaries when the substance of the relationship
indicates that the SPE is controlled by the Group.
 2.3
    
    Foreign currency transactions
 (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 functional currency of the Company is the South
African Rand. The presentation currency of these financial statements is the US Dollar.References to A$ refers to Australian currency,
R or Rand to South African currency, $ or US$ to
United States currency and K or Kina to Papua New Guinea 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. These transactions are included in the determination of other
(expenses)/income  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 are recognized in profit or loss, and other changes in carrying amount are
recognized in other reserves.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 reserves.
d) equity items are translated at historic rates.d)
    
    equity items are translated at historic rates.
 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 reserves. When a foreign operation is sold, exchange differences
that were recorded in equity are recognized in profit or loss as part of the gain or loss on sale.Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated
as assets and liabilities of the foreign operation 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. The accounting policies of the segments are the same as those described in the
accounting policy notes to the financial statements.
 F-11




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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 amortization and impairment.At the Groups surface mines, when it has been determined that a mineral property can be
economically developed as a result of establishing proven 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, and are amortized using the units-of-production method over the estimated
life of the ore body based on estimated recoverable ounces or pounds mined from proven and probable
reserves. 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 as a result of establishing proven and
probable reserves associated with specific ore blocks or areas of operations. 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.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.(iii)
    
    Undeveloped properties are 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 proven
and probable reserves. Development phase mineral interests represent interests in properties under
development that contain proven 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 proven 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 proven or probable reserves
have been established. In certain limited situations, the nature of mineral use rights change from
exploration rights to mining rights upon the establishment of proven 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 proven and probable reserves and/or undeveloped
mineral interests.
 F-12




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##### Table of Contents



(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 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 amortization of mining assets:Depreciation and amortization of mineral
property interests, mineral and surface rights, mine development costs and mine plant facilities
are computed principally by the units of production method based on estimated proven and probable
reserves. Changes in managements estimates of the quantities of economically recoverable reserves
impact amortization and depreciation on a prospective basis.Costs incurred and capitalized to enable access to specific ore blocks or areas of the mine, and
which only provide an economic benefit over the period of mining that ore block or area, are
amortized using the units-of-production method where the denominator is estimated recoverable
ounces of gold contained in proven and probable reserves within that ore block or area.If capitalized underground development costs provide an economic benefit over the entire
life-of-mine, the costs are amortized using the unit-of-production method, where the denominator is
the estimated recoverable ounces of gold contained in total accessible proven and probable
reserves.Proven and probable ore reserves reflect estimated quantities of economically recoverable reserves
which can be recovered in future from known mineral deposits. Amortization is first charged on
mining ventures from the date on which the mining ventures are considered to have moved into the
production phase.(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;
    
    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. These are
included 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.
 2.6
    
    Exploration costsThe Group expenses all exploration and evaluation expenditures until the directors conclude that a
future economic benefit is more likely to be realized than not, i.e. probable. The information
that the directors use 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 expenditure is capitalized within
development costs if the final feasibility study demonstrates that future economic benefits are
probable.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 directors
are able to demonstrate that future economic benefits are probable through the completion of a
prefeasibility study, after which the expenditure is capitalized as a mine development cost. A
prefeasibility 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 prefeasibility 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
directors to conclude that it is more likely than not that the Group will obtain future economic
benefit from the expenditures.
 F-13




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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. Costs relating to property acquisitions are also capitalized. These costs are
capitalized within development costs.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:
 (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 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 not reversed. The impairment testing is performed on April 30.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
reorganisation, the goodwill is reallocated 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 are capitalized on the basis of costs incurred to acquire and
bring to use the specific software. 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 for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.An impairment loss is recognized 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.The assets recoverable amount is generally determined 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.The term recoverable minerals refers to the estimated amount of gold that will be obtained from
proven and probable reserves 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.
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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.Non-financial assets other than goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at each reporting date.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
and loss.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 held for performance bonds, as security deposits on mining
tenements, cash held to acquire shares in subsidiaries as part of the compulsory takeover of shares
as well as cash held on margin call in terms of certain conditions of borrowing agreements.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. 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.
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(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 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 reserves. Changes in the fair value of monetary
and non-monetary securities classified as available-for-sale are recognized in other reserves.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 on sale of listed investments. 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.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, in the opinion of the
directors, permanent diminution in value exists for available-for-sale financial assets, 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. Impairment losses recognized
in the income statement on equity instruments are not reversed through the income statement.(iii)
    
    Held-to-maturity investmentsare 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.The restricted investments (refer note 18) are classified as held-to-maturity investments.(iv)
    
    Financial assets at fair value through profit or lossFinancial 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 and 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.
 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.The fair value of the liability portion of a convertible bond is determined using a market interest
rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortized
cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds
are allocated to the conversion option. This is recognized and included in equity, net of income
tax effects.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.
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2.10
    
    InventoriesInventories which include bullion on hand, gold in process 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 and gold in process is determined by reference to production cost,
including amortization and depreciation at the relevant stage of production.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. Bullion on hand and gold in process at certain of the underground operations include
gold in lockup which can be reliably measured, and generally this is from the smelter onwards.
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, normally from when ore is broken underground. 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 saleA non-current asset or disposal group (a business grouping of assets and their related liabilities)
is designated as held for sale when its carrying amount will be recovered principally through a
sale transaction rather that 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 gain 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.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.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 operations, the subsequent
classification as held for sale and used also requires that the discontinued operation be included
in continuing operations. Comparative information in the income statement relating to the
classification as a discontinued operation is restated accordingly.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.
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Based on damage done 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. Rehabilitation projects undertaken, included
in the estimates are charged to the provision as incurred. The cost of ongoing 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 fundsAnnual contributions 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. Contributions are determined on the basis of the
estimated environmental obligation over the life of the mine. The trusts are consolidated into the
Group. Income earned on monies paid to environmental trust funds is accounted for as investment
income. The funds contributed to the trusts plus growth 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. 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.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. Deferred tax is
charged to the income statement, 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. 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, 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 unused tax losses and unutilized capital allowances can
be utilized.Deferred income tax is provided on temporary differences arising on investments in subsidiaries 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.2.16
    
    Employee benefits
 (i)
    
    Pension and provident plansare funded through annual contributions. The Groups contributions
to the defined contribution pension and provident plans are charged to the income statement in the
year to which they relate. The Groups liability is limited to its annually determined
contributions.(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 market yields consistent with the term
and risks of the obligation. 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.
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(iii)
    
    Equity compensation benefits:The Group operates an
equity-settled, share-based payments plan, where the Group grants share options to certain
employees. Equity share-based payments are measured at fair value of the equity instruments at the
date of the grant. The share-based payments is 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.(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 but includes the net realized profit and losses arising
from hedging transactions from matched gold sales contracts. 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 shareholders.
Dividends are payable in South African Rand.Dividends declared which are payable to foreign shareholders are subject to approval by the South
African Reserve Bank in terms of South African foreign exchange control regulations. In practice,
dividends are freely transferable to foreign shareholders.
 3
    
    Critical accounting estimates and judgmentsThe 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 judgments 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.
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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 ore body and country
risk in determining the fair value.Key assumptions for the calculations of the mining assets recoverable amounts are the forward gold
price 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 forward gold price. The life of mine plans are based on the proven and probable reserves
as included in the Reserve Declaration, which are determined in terms of SAMREC and JORC.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 R180 000 per kilogram and
a discount rate of 11.36% (2007: R115 000 per kilogram and a 9.18% discount rate) (2006: R105 000
per kilogram and a 8.38% discount rate). 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 proven and probable ore reserves;
    
    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.
 It is impracticable to disclose the extent of the possible effects the changes in assumptions for
the forward gold price and life of mine plans at June 30, 2008, as these assumptions are
inextricably linked.3.2
    
    Impairment of investment in associateThe investments in associates are evaluated 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. In calculating fair value less cost to sell, the cash flows from disposal are looked
at: with reference to the closing share price on year end, average share price over a reasonable
period thereafter as well as recent transactions.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.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.Management used a short term (two years) inflation rate of 9%, a long term inflation rate of 6%
(2007: 5%) (2006: 5.5%) 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  12.25% (2007: 13.77%); for 1  5 years  11.75% (2007:10.61%); for 5  9 years  10.5%
(2007: 9.49%) and for 10 years or more  10.25% (2007: 9.25%) (2006: discount rate of 12.88%).
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 12%, 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 9.8% (2006 and 2007: discount rate of 9%, 60
years and 6.34% inflation rate).Management determined the discount rate by assessing financial instruments with similar terms to
the liability. The increases 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 judgment 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 issues based on estimates of
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whether
additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
 Management has to exercise judgment 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 raised.3.7
    
    Fair value of share-based paymentsThe fair value of options granted are being determined using either a binominal or a Monte Carlo
valuation model. The significant inputs into the model are: vesting period and conditions, risk
free interest rate, volatility, price on date of grant and dividend yield. (Refer to note 35 for
detail on each of the share option schemes.)3.8
    
    Impairment of goodwillThe Group tests annually whether separately identifiable goodwill has suffered any impairment, in
accordance with the accounting policy stated in note 2.8. Refer to note 17 for the method used in
determining the recoverable amounts of cash-generating units. These calculations require the use of
estimates as stated in note 3.1.3.9
    
    Gold in lock-upGold in lock-up in certain plants is estimated based on the calculated plant call factor. Plant
call factor is the efficiency measurement of the percentage of gold extracted from the ore.3.10
    
    Assessment of contingenciesContingencies will only realize when one or more future events occur or fail to occur. The exercise
of significant judgment and estimates of the outcome of future events are required during the
assessment of the impact of such contingencies.3.11
    
    Gold mineral reservesGold mineral reserves 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, 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 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 judgments and calculations to
interpret the data.Because the economic assumptions used to estimate the gold mineral reserves change from year to
year, and because additional geological data is generated during the course of operations,
estimates of the mineral reserves may change from year to year. Changes in the proven and probable
reserves 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;
    
    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 proven and probable gold mineral reserve is
updated. Depreciation of mining assets is prospectively adjusted, based on these changes.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);
    
    the ability to sustain the ongoing production of gold.
 4
    
    Financial risk management
 The Groups activities 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.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 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
 F-21




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##### Table of Contents



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 riskThe Group operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the US dollar (US$). Foreign exchange risk arises
from future commercial transactions, recognized assets and liabilities and net investments in
foreign operations. Foreign exchange risk arises when future commercial transactions or recognized
assets or liabilities are denominated in a currency that is not the entitys functional currency.
Harmonys revenues are sensitive to the Rand/US$ exchange rate as all revenues are generated by
gold sales denominated in US$. Harmony generally, does not enter into forward sales, derivatives or
other hedging arrangements to establish a Rand/US$ exchange rate in advance for the sale of its
future gold production.The Group has certain investments in foreign operations, whose net assets are exposed to foreign
currency translation risk.Harmony generally does not enter into forward sales, derivatives or
other hedging arrangements to manage this risk.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
    
    2008
    
    
    2007A$ against the US$Increase by ten percent
    
    
    3
    
    
    
    Decrease by ten percent
    
    
    (3
    )
    
    
    Closing rate
    
    
    0.96
    
    
    
    0.85A$ against the RandIncrease by ten percent
    
    
    30
    
    
    
    14Decrease by ten percent
    
    
    (30
    )
    
    
    (14
    )Closing rate
    
    
    7.51
    
    
    
    6.00Kina against the A$Increase by ten percent
    
    
    35
    
    
    
    12Decrease by ten percent
    
    
    (35
    )
    
    
    (12
    )Closing rate
    
    
    2.42
    
    
    
    2.43
 (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 analysisThe equity investments are listed on the Australian Securities Exchange. A 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$0.1 million (2007: US$3.5 million); an equal change in the
opposite direction would have decreased other comprehensive income by US$0.1 million (2007: US$3.5
million). The analysis is performed on the same basis for 2007.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 both fixed
and variable interest rate borrowings. Fixed rate borrowings expose the Group to fair value
interest rate risk. Variable rate borrowings expose the Group to cash flow interest rate risk. The
Group has not entered into interest rate swap agreements.
 F-22




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##### Table of Contents



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 2007.
 US DollarFigures in million
    
    2008
    
    
    2007Increase in 100 basis points
    
    
    3
    
    
    
    16Decrease in 100 basis points
    
    
    (3
    )
    
    
    (16
    )
 The above table excludes the fixed rate convertible bond. As it is accounted for at amortized cost,
interest rate changes do not affect reported profit and loss.(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.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$361.2 million as at June 30, 2008
(2007: US$409.4 million).(c)
    
    Liquidity RiskPrudent liquidity risk management implies maintaining sufficient cash and marketable securities,
the availability of funding through an adequate amount of committed credit facilities and the
ability to close out market positions. Due to the dynamic nature of the underlying businesses,
Group Treasury aims to maintain flexibility in funding by keeping committed credit lines available.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-23




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##### Table of Contents



The following are the contractual maturities of financial liabilities (including principal and
interest payments):
 More than 1Current
    
    
    yearFigures in million
    
    US Dollar2008Borrowings (1)(2)
    
    
    518
    
    
    
    29Trade and other payables (excluding non-financial instruments)
    
    
    101
    
    
    
    619
    
    
    
    292007Borrowings (1)(2)
    
    
    422
    
    
    
    277Trade and other payables (excluding non-financial instruments)
    
    
    114
    
    
    
    Bank overdraft
    
    
    31
    
    
    
    567
    
    
    
    277
 (1)
    
    US$226.8 million is due between 6 to 12 months (2007: US$5.8 million)(2)
    
    US$7.4 million is due between 1 to 2 years (2007: US$277.4 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
(borrowings and bank overdraft) 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.The Group is subject to externally imposed capital requirements in the form of loan covenants
relating to interest cover, which may have an impact on the manner in which capital is utilized.
The Group has complied with these capital requirements during the periods under review.(e)
    
    Fair value determinationThe carrying values (less any impairment allowance) of short-term financial instruments are assumed
to approximate their fair values.The fair value of available-for-sale financial assets and derivative financial instruments are
determined by reference to quoted market prices. The fair value of other non-current financial
instruments are determined using a discounted cash flow model with market observable inputs, such
as market interest rates.
 F-24




---



##### Table of Contents



CarryingFair Value
    
    
    ValueFigures in million
    
    US Dollar2008Financial assetsRestricted investments
    
    
    211
    
    
    
    211Investment in financial assets
    
    
    9
    
    
    
    9Trade and other receivables
    
    
    87
    
    
    
    87Restricted cash
    
    
    10
    
    
    
    10Cash and cash equivalents
    
    
    53
    
    
    
    53370
    
    
    
    370Financial liabilitiesBorrowings *
    
    
    526
    
    
    
    526Trade and other payables
    
    
    94
    
    
    
    94620
    
    
    
    6202007Financial assetsRestricted investments
    
    
    195
    
    
    
    195Investment in financial assets
    
    
    8
    
    
    
    8Trade and other receivables
    
    
    65
    
    
    
    65Restricted cash
    
    
    41
    
    
    
    41Cash and cash equivalents
    
    
    101
    
    
    
    101410
    
    
    
    410Financial liabilitiesBorrowings
    
    
    682
    
    
    
    653Trade and other payables
    
    
    96
    
    
    
    96Bank overdraft
    
    
    31
    
    
    
    31809
    
    
    
    780
 *
    
    Included under borrowings is an uncollateralized convertible fixed rate bond which has a fair
value of US$209.2 million (US$247.2 million) being 96% of the nominal value as at June 30, 2008
(2007: 102.36% of the nominal value). F-25




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##### Table of Contents



5
    
    Cost of sales
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Production costs (a)
    
    
    918
    
    
    
    836
    
    
    
    778Amortization and depreciation of mining properties, mine development costs
and mine plant facilities
    
    
    107
    
    
    
    102
    
    
    
    129Amortization and depreciation of assets other than mining properties, mine
development costs and mine plant facilities (b)
    
    
    10
    
    
    
    4
    
    
    
    9Provision/(reversal of provision) for rehabilitation costs (c)
    
    
    1
    
    
    
    (6
    )
    
    
    (3
    )Care and maintenance cost of restructured shafts
    
    
    10
    
    
    
    8
    
    
    
    22Employment termination and restructuring costs (d)
    
    
    29
    
    
    
    
    
    
    
    (12
    )Share-based payments
    
    
    6
    
    
    
    6
    
    
    
    15Impairment/(reversal of impairment) of assets (e)
    
    
    40
    
    
    
    (19
    )
    
    
    (30
    )Provision for former employees post retirement benefits
    
    
    1
    
    
    
    (2
    )
    
    
    1Total cost of sales
    
    
    1,122
    
    
    
    929
    
    
    
    909
 (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
    
    2008
    
    
    2007
    
    
    2006Labor costs, including contractors
    
    
    632
    
    
    
    612
    
    
    
    561Stores and materials
    
    
    229
    
    
    
    196
    
    
    
    184Water and electricity
    
    
    90
    
    
    
    91
    
    
    
    95Hospital costs
    
    
    10
    
    
    
    4
    
    
    
    11Changes in inventory
    
    
    11
    
    
    
    (10
    )
    
    
    (16
    )Capitalization of mine development costs
    
    
    (109
    )
    
    
    (64
    )
    
    
    (84
    )By-products sales
    
    
    (4
    )
    
    
    (3
    )
    
    
    (1
    )Other
    
    
    59
    
    
    
    10
    
    
    
    28Total production cost
    
    
    918
    
    
    
    836
    
    
    
    778
 (b)
    
    Amortization and depreciation of assets other than mining properties, mine development costs and mine plant facilities consist of the
following: US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Other non-mining assets
    
    
    4
    
    
    
    2
    
    
    
    7Intangible assets
    
    
    2
    
    
    
    1
    
    
    
    Borrowings issue costs
    
    
    4
    
    
    
    1
    
    
    
    2Total amortization and depreciation
    
    
    10
    
    
    
    4
    
    
    
    9
 (c)
    
    For the assumptions used to calculate the rehabilitation costs, refer to note 3.4.(d)
    
    Employment termination and restructuring costs consist of the following: US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Free State
    
    
    10
    
    
    
    
    
    
    
    (9
    )Randfontein and Elandskraal
    
    
    5
    
    
    
    
    
    
    
    1Evander
    
    
    3
    
    
    
    
    
    
    
    1Freegold
    
    
    10
    
    
    
    
    
    
    
    (5
    )Avgold
    
    
    1
    
    
    
    
    
    
    
    Total employment termination and restructuring cost
    
    
    29
    
    
    
    
    
    
    
    (12
    )
  F-26




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##### Table of Contents



(e)
    
    Impairment/(reversal of impairment) consist of the following:
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Free State
    
    
    
    
    
    
    2
    
    
    
    (22
    )Lydex
    
    
    
    
    
    
    
    
    
    
    16Evander
    
    
    16
    
    
    
    
    
    
    
    (11
    )Kalgold
    
    
    8
    
    
    
    (19
    )
    
    
    Bambanani
    
    
    
    
    
    
    
    
    
    
    (7
    )Other underground  assets
    
    
    3
    
    
    
    (2
    )
    
    
    (6
    )Other underground  goodwill
    
    
    13
    
    
    
    
    
    
    
    Total impairment/(reversal of impairment)
    
    
    40
    
    
    
    (19
    )
    
    
    (30
    )
     6
    
    Other (expenses)/income  net
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Foreign exchange gains/(losses)  net (a)
    
    
    13
    
    
    
    2
    
    
    
    (4
    )(Loss)/gain on financial instruments (b)
    
    
    (1
    )
    
    
    6
    
    
    
    (81
    )Profit on sale of property, plant and equipment (c)
    
    
    
    
    
    
    25
    
    
    
    10Non-mining bad debts (d)
    
    
    (14
    )
    
    
    (1
    )
    
    
    (1
    )Other expenses  net
    
    
    (13
    )
    
    
    (7
    )
    
    
    (21
    )Total other (expenses)/income  net
    
    
    (15
    )
    
    
    25
    
    
    
    (97
    )
 (a)
    
    Included in 2008 is a US$15.3 million foreign exchange gain related to
the two loans to the International operations. The loans, which were previously designated as
net investments of the Groups International operations, were de-designated in 2008, mainly as a result
of the expected proceeds from the PNG Partnership Agreement (see note 39). Foreign exchange gains/(losses) arising after
de-designation of the loans have been included in the consolidated income statements. Accumulated foreign exchange
gains/(losses) that arose while the loans were considered to form part of the Groups net
investment in its International operations, will be
reclassified to the consolidated income statements as and when the loans are repaid.(b)
    
    The amounts in prior years mainly relate to the Australian hedge book which was closed in 2007.(c)
    
    The Randfontein 4 Shaft was sold to Ezulwini Mining Company (Pty) Ltd on December 29, 2006, resulting in a profit of US$9.8 million.The Deelkraal surface assets were disposed of at a profit of US$13.7 million to Ogoerion Construction CC on April 5, 2007.(d)
    
    The amount in 2008 includes a provision for the outstanding
balance of US$6.4 million on the sale of Deelkraal to Ogoerion
Construction CC. F-27




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##### Table of Contents



7
    
    Operating profit/(loss)
  US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Auditors remuneration
    
    
    3
    
    
    
    2
    
    
    
    2
 8
    
    Profit on sale of investment in associate
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Profit on the sale of Western Areas Limited
    
    
    
    
    
    
    33
    
    
    
    
  9
    
    Fair value of non-derivative financial instruments
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Mark-to-market adjustment
    
    
    5
    
    
    
    15
    
    
    
    14
  10
    
    Loss on sale of investment
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006(Loss)/profit on sale of investment in Gold Fields Limited
    
    
    (63
    )
    
    
    (5
    )
    
    
    45
    11
    
    Investment income
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Interest received
    
    
    34
    
    
    
    24
    
    
    
    29Loans and receivables
    
    
    5
    
    
    
    1
    
    
    
    3Held-to-maturity investments
    
    
    18
    
    
    
    14
    
    
    
    9Cash and cash equivalents
    
    
    11
    
    
    
    9
    
    
    
    17Dividend income on available-for-sale
    
    
    5
    
    
    
    3
    
    
    
    2Total investment income
    
    
    39
    
    
    
    27
    
    
    
    31
 F-28




---



##### Table of Contents



12
    
    Finance costs
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Financial instrumentsBank and short-term facilities
    
    
    5
    
    
    
    
    
    
    
    Senior
uncollateralized fixed rate bonds
    
    
    
    
    
    
    
    
    
    
    14Convertible uncollateralized fixed rate bonds
    
    
    22
    
    
    
    21
    
    
    
    23Nedbank Limited
    
    
    38
    
    
    
    18
    
    
    
    16Rand Merchant Bank
    
    
    2
    
    
    
    13
    
    
    
    4Other creditors
    
    
    1
    
    
    
    5
    
    
    
    68
    
    
    
    57
    
    
    
    57Non-financial instrumentsPost-retirement benefits
    
    
    1
    
    
    
    1
    
    
    
    1Time value of money and inflation component of rehabilitation costs
    
    
    15
    
    
    
    15
    
    
    
    10South African Revenue Services (SARS)
    
    
    8
    
    
    
    2
    
    
    
    24
    
    
    
    18
    
    
    
    1192
    
    
    
    75
    
    
    
    68Interest capitalized
    
    
    (22
    )
    
    
    (10
    )
    
    
    (6
    )Total finance costs
    
    
    70
    
    
    
    65
    
    
    
    62
 13
    
    Taxation
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006SA normal taxationMining tax(a)- current year
    
    
    (5
    )
    
    
    
    
    
    
    - prior year
    
    
    (15
    )
    
    
    
    
    
    
    Non-mining tax(b)- current year
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )- prior year
    
    
    (1
    )
    
    
    1
    
    
    
    Deferred tax(c)- deferred tax
    
    
    (55
    )
    
    
    (60
    )
    
    
    (31
    )Foreign normal taxation- deferred tax (d)
    
    
    12
    
    
    
    22
    
    
    
    11Total normal taxation
    
    
    (65
    )
    
    
    (39
    )
    
    
    (22
    )
 (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
and 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.The formulas for determining the South African gold mining tax rates are:Y = 43 - 215/X (elect not to pay STC)Y = 45 - 225/X (elect not to pay STC for 2007 and 2006)Y = 34 - 170/X (no election made)Y = 35 - 175/X (no election made for 2007 and 2006)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.
 F-29




---



##### Table of Contents



(b)
    
    Non-mining income is taxed at 35% (exempt from STC) (2007: 37% and 2006:
37%) and 28% (no election made) (2007: 29% and 2006: 29%). Non-mining
companies are taxed at the statutory corporate rate of 28% (2007: 29%
and 2006: 29%).(c)
    
    The 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 tax
rate can consequently be significantly different from year to year.(d)
    
    Mining and non-mining income of Australia operations are taxed at a
standard rate of 30% (2007: 30% and 2006: 30%). Deferred tax is provided
at the estimated expected future mining tax rate for temporary
differences, based on tax rates enacted at balance sheet date.The taxation rates in South African were changed in the 2008 year after
an announcement of a reduction in the applicable rates by the Finance
Minister in his annual budget speech in February 2008.Major items causing the Groups income tax provision to differ from the
maximum mining statutory tax rate of 43% (2007: 45% and 2006: 45%) were:
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Tax on net income at the maximum mining statutory tax rate
    
    
    (33
    )
    
    
    (34
    )
    
    
    28Non-taxable income / non-allowable deductions
    
    
    (50
    )
    
    
    (12
    )
    
    
    (15
    )Difference between effective mining tax rate and statutory mining rate on mining income
    
    
    4
    
    
    
    
    
    
    
    6Difference between non-mining tax rate and statutory mining rate on non-mining income
    
    
    
    
    
    
    1
    
    
    
    (12
    )Effect on temporary differences due to changes in effective tax rates
    
    
    (8
    )
    
    
    5
    
    
    
    (29
    )Prior year adjustment  mining and non-mining tax
    
    
    (16
    )
    
    
    1
    
    
    
    Capital allowance and sale of business
    
    
    38
    
    
    
    
    
    
    
    Income and mining taxation
    
    
    (65
    )
    
    
    (39
    )
    
    
    (22
    )Effective income and mining tax rate
    
    
    172
    %
    
    
    -25
    %
    
    
    24
    %
  US DollarFigures in million
    
    2008
    
    
    2007Deferred tax liabilitiesGross deferred tax liability
    
    
    579
    
    
    
    599Amortization and depreciation
    
    
    540
    
    
    
    581Product inventory not taxed
    
    
    13
    
    
    
    14Convertible bonds
    
    
    1
    
    
    
    3Other
    
    
    25
    
    
    
    1Gross deferred tax assets
    
    
    (190
    )
    
    
    (216
    )Deferred financial liability
    
    
    
    
    
    
    (4
    )Unredeemed capital expenditure
    
    
    (105
    )
    
    
    (124
    )Provisions, including non-current provisions
    
    
    (27
    )
    
    
    (37
    )Tax losses
    
    
    (58
    )
    
    
    (51
    )Non-current assets reclassified as held for sale
    
    
    (6
    )
    
    
    3Net deferred tax liability
    
    
    383
    
    
    
    386Movement in the net deferred tax liability recognized in the balance sheet is as follows:At the beginning of the year
    
    
    386
    
    
    
    324Total charge per income statement (a)
    
    
    47
    
    
    
    46Foreign currency translation adjustments
    
    
    (41
    )
    
    
    13Tax directly charged to equity (b)
    
    
    (4
    )
    
    
    Non-current assets reclassified as held for sale
    
    
    (5
    )
    
    
    3At the end of the year
    
    
    383
    
    
    
    386
 F-30




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007Deferred tax liabilities
    
    
    38
    
    
    
    16Deferred tax assets
    
    
    (21
    )
    
    
    (17
    )17
    
    
    
    (1
    )
   (a)
    
    The charge includes the amounts for both continuing and discontinued operations.(b)
    
    The charge relates to deferred tax asset on the downward mark-to-market
adjustment during the year on available-for-sale financial assets by Australian
operations. See notes 19 and 27 in this regard.
 14
    
    Non-current assets or disposal group held for sale and discontinued operations
       US DollarFigures are in million
    
    2008
    
    
    2007Balance sheetNon-current assets classified as held for saleProperty, plant and equipment
    
    
    152
    
    
    
    124Restricted cash
    
    
    
    
    
    
    1Restricted investments
    
    
    22
    
    
    
    8Investment financial assets
    
    
    
    
    
    
    1Deferred income tax
    
    
    
    
    
    
    17Inventories
    
    
    22
    
    
    
    17Trade and other receivables
    
    
    1
    
    
    
    12Income and mining taxes
    
    
    
    
    
    
    2Total non-current assets classified as held for sale
    
    
    197
    
    
    
    182
 F-31




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##### Table of Contents



US DollarFigures are in million
    
    2008
    
    
    2007Balance sheetLiabilities directly associated with non-current assets classified as held for saleDeferred income tax
    
    
    6
    
    
    
    14Provisions for other liabilities and charges
    
    
    50
    
    
    
    36Trade and other payables
    
    
    8
    
    
    
    19Accrued liabilities
    
    
    
    
    
    
    8Total liabilities directly associated with non-current assets classified as held for sale
    
    
    64
    
    
    
    77
  US DollarFigures are in million
    
    2008
    
    
    2007
    
    
    2006Income statementAnalysis of the results of discontinued operations,
and the results recognized on the re-measurement of
assets for disposal by the GroupRevenue
    
    
    312
    
    
    
    372
    
    
    
    327Expenses  net
    
    
    (238
    )
    
    
    (373
    )
    
    
    (300
    )Reversal of impairment/(impairment)
    
    
    5
    
    
    
    (56
    )
    
    
    Profit/(loss) from discontinued operations before tax
    
    
    79
    
    
    
    (57
    )
    
    
    27Taxation
    
    
    (5
    )
    
    
    (9
    )
    
    
    (5
    )Taxation on impairment
    
    
    (2
    )
    
    
    16
    
    
    
    Taxation on discontinued operations
    
    
    (3
    )
    
    
    (25
    )
    
    
    (5
    )Profit/(loss) for the year from discontinued operations
    
    
    74
    
    
    
    (66
    )
    
    
    22
 US DollarFigures are in million
    
    2008
    
    
    2007
    
    
    2006Cash flowsOperating cash flows
    
    
    71
    
    
    
    (17
    )
    
    
    17Investing cash flows
    
    
    (16
    )
    
    
    
    
    
    
    41Financing cash flows
    
    
    
    
    
    
    
    
    
    
    (25
    )Foreign exchange translation adjustment
    
    
    (7
    )
    
    
    
    
    
    
    (6
    )Total cash flows
    
    
    48
    
    
    
    (17
    )
    
    
    27
 15
    
    (Loss)/earnings per share
  US Dollar2008
    
    
    2007
    
    
    2006Weighted average number of ordinary shares in issue (000)
    
    
    400,750
    
    
    
    397,911
    
    
    
    393,727Net (loss)/profit from continuing operations
    
    
    (104
    )
    
    
    117
    
    
    
    (113
    )Net profit/(loss) from discontinued operations
    
    
    74
    
    
    
    (66
    )
    
    
    22Total net (loss)/profit attributable to shareholders
    
    
    (30
    )
    
    
    51
    
    
    
    (91
    )Basic (loss)/earnings per share from continuing operations (cents)
    
    
    (26
    )
    
    
    29
    
    
    
    (29
    )Basic earnings/(loss) per share from discontinued operations (cents)
    
    
    18
    
    
    
    (17
    )
    
    
    6Total basic (loss)/earnings per share (cents)
    
    
    (8
    )
    
    
    12
    
    
    
    (23
    )
 Fully diluted (loss)/earnings per share
  F-32




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Weighted average number of ordinary shares in issue (000)
    
    
    400,750
    
    
    
    397,911
    
    
    
    393,727Potential ordinary shares (000)
    
    
    2,144
    
    
    
    4,471
    
    
    
    Weighted average number of ordinary shares for fully diluted earnings per share (000)
    
    
    402,894
    
    
    
    402,382
    
    
    
    393,727Fully diluted (loss)/earnings per share from continuing operations (cents)
    
    
    (26
    )
    
    
    29
    
    
    
    (29
    )Fully diluted earnings/(loss) per share from discontinued operations (cents)
    
    
    18
    
    
    
    (17
    )
    
    
    6Total fully diluted (loss)/earnings per share (cents)
    
    
    (8
    )
    
    
    12
    
    
    
    (23
    )
  16
    
    Property, plant and equipment
 US DollarFigures in million
    
    2008
    
    
    2007Mining properties, mine development costs and mine plant facilities
    
    
    1,532
    
    
    
    1,438Mining assets under construction
    
    
    561
    
    
    
    404Undeveloped properties
    
    
    1,434
    
    
    
    1,621Deferred stripping
    
    
    
    
    
    
    12Other non-mining assets
    
    
    4
    
    
    
    9Total property, plant and equipment
    
    
    3,531
    
    
    
    3,484Mining properties, mine development costs and mine plant facilitiesCostBalance at beginning of year
    
    
    2,745
    
    
    
    2,791Additions
    
    
    316
    
    
    
    204Disposals
    
    
    (174
    )
    
    
    (2
    )Adjustment to rehabilitation asset
    
    
    13
    
    
    
    54Transfers and other movements
    
    
    166
    
    
    
    Translation
    
    
    (176
    )
    
    
    108Net reclassification to held for sale
    
    
    (369
    )
    
    
    (410
    )Balance at end of year
    
    
    2,521
    
    
    
    2,745Accumulated depreciationBalance at beginning of year
    
    
    1,307
    
    
    
    1,387Impairment of fixed assets (a)
    
    
    13
    
    
    
    55Disposals
    
    
    (104
    )
    
    
    Depreciation for the year (a)
    
    
    118
    
    
    
    158Depreciation for the year capitalized to mining assets under construction
    
    
    6
    
    
    
    Transfers and other movements
    
    
    
    
    
    
    Translation
    
    
    (34
    )
    
    
    36Net reclassification to held for sale
    
    
    (317
    )
    
    
    (329
    )Balance at end of year
    
    
    989
    
    
    
    1,307Net book value
    
    
    1,532
    
    
    
    1,438
 F-33




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007Mining
assets under constructionCostBalance at beginning of year as previously reported
    
    
    384
    
    
    
    208Effect of change in accounting policy (note 2.1)
    
    
    20
    
    
    
    11Restated balance at beginning of year
    
    
    404
    
    
    
    219Additions (b)
    
    
    233
    
    
    
    166Finance costs capitalized
    
    
    22
    
    
    
    8Disposals
    
    
    (4
    )
    
    
    Transfers and other movements
    
    
    (84
    )
    
    
    Translation
    
    
    (13
    )
    
    
    14Net reclassification from/(to) held for sale
    
    
    3
    
    
    
    (3
    )Book value
    
    
    561
    
    
    
    404Undeveloped propertyCostBalance at beginning of year
    
    
    1,630
    
    
    
    1,705Additions
    
    
    
    
    
    
    5Disposals
    
    
    (24
    )
    
    
    (3
    )Transfers and other movements
    
    
    (74
    )
    
    
    Translation
    
    
    (80
    )
    
    
    29Net reclassification to held for sale
    
    
    (16
    )
    
    
    (106
    )Balance at end of year
    
    
    1,436
    
    
    
    1,630Accumulated depreciationBalance at beginning of year
    
    
    9
    
    
    
    76Reversal on impairment of fixed assets (a)
    
    
    (6
    )
    
    
    (10
    )Depreciation for the year (a)
    
    
    
    
    
    
    1Transfers and other movements
    
    
    9
    
    
    
    Translation
    
    
    16
    
    
    
    9Net reclassification to held for sale
    
    
    (26
    )
    
    
    (67
    )Balance at end of year
    
    
    2
    
    
    
    9Net book value
    
    
    1,434
    
    
    
    1,621Deferred strippingCostBalance at beginning of year
    
    
    12
    
    
    
    13Translation
    
    
    (1
    )
    
    
    Reversal of deferred costs
    
    
    (3
    )
    
    
    (1
    )Balance at end of year
    
    
    8
    
    
    
    12Accumulated depreciationBalance at beginning of year
    
    
    
    
    
    
    9Impairment/(reversal of impairment) of fixed assets
    
    
    8
    
    
    
    (9
    )Balance at end of year
    
    
    8
    
    
    
    Net book value
    
    
    
    
    
    
    12Other non-mining assetsCostBalance at beginning of year
    
    
    46
    
    
    
    48Additions
    
    
    2
    
    
    
    Disposals
    
    
    (5
    )
    
    
    Transfers and other movements
    
    
    4
    
    
    
    Translation
    
    
    (6
    )
    
    
    2Net reclassification from/(to) held for sale
    
    
    3
    
    
    
    (4
    )Balance at end of year
    
    
    44
    
    
    
    46
 F-34




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007Accumulated depreciationBalance at beginning of year
    
    
    37
    
    
    
    38Disposals
    
    
    (4
    )
    
    
    Depreciation for the year (a)
    
    
    4
    
    
    
    2Transfers and other movements
    
    
    4
    
    
    
    Translation
    
    
    (4
    )
    
    
    Net reclassification from/(to) held for sale
    
    
    3
    
    
    
    (3
    )Balance at end of year
    
    
    40
    
    
    
    37Net book value
    
    
    4
    
    
    
    9Total net book value
    
    
    3,531
    
    
    
    3,484
 (a)
    
    The amounts include both continuing and discontinued operations.(b)
    
    Included in these additions are royalty agreements that Rio Tinto had over the Hidden Valley and
Kerimenge deposits in Papua New Guinea (PNG). In terms of the royalty agreement, Rio Tinto had the
rights to receive a portion of between 2% and 3.5% of future ounces produced by the Hidden Valley
mine in PNG. During March 2008, Harmony concluded the buy back of these royalty
rights for US$22.5 million through the issue of US$20 million Harmony shares and US$2.5 million in
cash.(c)
    
    Additional disclosures US DollarFigures in million
    
    2008
    
    
    2007Leased assetsCarrying value of capitalized leased assets (included in mining assets under construction)
    
    
    34
    
    
    
    Cost
    
    
    37
    
    
    
    Accumulated depreciation
    
    
    (3
    )
    
    
    Finance lease additions
    
    
    35
    
    
    
    
 17
    
    Intangible assets
 US DollarFigures in million
    
    2008
    
    
    2007GoodwillCostBalance at beginning of year (a)
    
    
    337
    
    
    
    331Translation
    
    
    (33
    )
    
    
    6Balance at end of year
    
    
    304
    
    
    
    337Accumulated impairmentBalance at beginning of year
    
    
    15
    
    
    
    15Impairment loss (b)
    
    
    13
    
    
    
    Translation
    
    
    (1
    )
    
    
    Balance at end of year
    
    
    27
    
    
    
    15Net book value
    
    
    277
    
    
    
    322Computer softwareCostBalance at the beginning of year (c)
    
    
    6
    
    
    
    Acquired during the year (d)
    
    
    3
    
    
    
    7Translation
    
    
    (1
    )
    
    
    Balance at end of year
    
    
    8
    
    
    
    7Accumulated amortizationBalance at the beginning of year
    
    
    1
    
    
    
    Amortization charge for the year
    
    
    2
    
    
    
    1Translation
    
    
    (1
    )
    
    
    Balance at end of year
    
    
    2
    
    
    
    1
 F-35




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007Net book value
    
    
    6
    
    
    
    6Total net book value
    
    
    283
    
    
    
    328
 (a)
    
    The opening carrying value of goodwill relates to the acquisition of ARMgold on September 22,
2003.  US DollarFigures in million
    
    2008
    
    
    2007Bambanani
    
    
    29
    
    
    
    32Tshepong
    
    
    72
    
    
    
    152Phakisa
    
    
    170
    
    
    
    116Other
    
    
    6
    
    
    
    22277
    
    
    
    322
  (b)
    
    The impairment of goodwill relates to goodwill allocated to other underground segments. The
related mining assets have also been impaired. Refer to note 5 (e).(c)
    
    The opening net book value relates to the acquisition of the Oracle ERP software implemented in
December 2006.(d)
    
    The amount above relates to additional development costs for the Oracle ERP software during the
year. 18
    
    Restricted investments
 US DollarFigures in million
    
    2008
    
    
    2007Investments held by Environmental trust funds (a)
    
    
    206
    
    
    
    198Investments held by Social trust fund (b)
    
    
    5
    
    
    
    5Total restricted investments
    
    
    211
    
    
    
    203Reclassified as non-current assets held for sale
    
    
    (23
    )
    
    
    (8
    )188
    
    
    
    195
 (a)
    
    The environmental trust funds are irrevocable trusts under the Groups control. Contributions
to the trust are invested primarily in interest-bearing short-term
investments. The costs of these investments
approximate their fair values. The investments provide for the estimated cost of rehabilitation
during and at the end of the life of the Groups mines. Income earned on the investments are
restricted in use and may only be used to fund the Groups approved rehabilitation costs.  US DollarFigures in million
    
    2008
    
    
    2007Opening balance
    
    
    197
    
    
    
    180Interest accrued
    
    
    21
    
    
    
    16Disposal of business
    
    
    (4
    )
    
    
    Contributions made
    
    
    11
    
    
    
    2Reimbursement of costs incurred
    
    
    
    
    
    
    (2
    )Translation
    
    
    (19
    )
    
    
    2Closing balance
    
    
    206
    
    
    
    198Non-current assets held for sale
    
    
    (23
    )
    
    
    (8
    )183
    
    
    
    190
 F-36




---



##### Table of Contents



(b)
    
    The Social trust fund is an irrevocable trust under the Groups control. 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 November 3, 2003. An initial donation of US$2.7 million was made
during the 2004 year. The balance will be donated in installments of R3.5 million (US$0.45 million)
per annum with the final installments 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.
  US DollarFigures in million
    
    2008
    
    
    2007Opening balance
    
    
    5
    
    
    
    4Contributions made
    
    
    1
    
    
    
    1Interest accrued
    
    
    
    
    
    
    Claims paid
    
    
    (1
    )
    
    
    Closing balance
    
    
    5
    
    
    
    5
 19
    
    Investment in financial assets
 US DollarFigures in million
    
    2008
    
    
    2007Beginning of the year
    
    
    361
    
    
    
    137Additions
    
    
    20
    
    
    
    309Disposals
    
    
    (362
    )
    
    
    (50
    )Mark-to-market
    
    
    (8
    )
    
    
    (50
    )Profit on
non-derivative financial instruments (refer note 9)
    
    
    5
    
    
    
    16Translation
    
    
    (7
    )
    
    
    9
    
    
    
    362Reclassified as current assets
    
    
    
    
    
    
    (353
    )Reclassified as non-current assets held for sale
    
    
    
    
    
    
    (1
    )End of the year
    
    
    9
    
    
    
    8
 The carrying amount consists of the following:
 Available-for-sale financial assetsInvestment in Clidet No. 700 (Pty) Ltd (a)
    
    
    
    
    
    
    7Investment in Alloy Resources (b)
    
    
    
    
    
    
    1Investment in Gold Fields Limited (c)
    
    
    
    
    
    
    204Investment in Dioro Exploration NL (d)
    
    
    8
    
    
    
    Investment in other unlisted shares(e)
    
    
    1
    
    
    
    19
    
    
    
    213Reclassified as current assets
    
    
    
    
    
    
    (353
    )Reclassified as non-current assets held for sale
    
    
    
    
    
    
    (1
    )Total available-for-sale financial assets
    
    
    9
    
    
    
    (141
    )At fair value through profit or lossInvestment in African Rainbow Minerals Limited (f)
    
    
    
    
    
    
    1499
    
    
    
    8
 (a)
    
    On December 11, 2006, Harmony subscribed to 50,000 cumulative redeemable participating
preference shares in Clidet No 700 (Proprietary) Limited (Clidet 700) for US$7.1 million. The
purchase consideration was paid on January 3, 2007. Clidet 700
used these funds to purchase 4,106,667
ordinary shares in Pamodzi Gold Limited (Pamodzi), which listed on the JSE Limited (JSE) on
December 11, 2006. Clidet 700 has ceded the Pamodzi shares to Harmony as security for the amounts
owing in terms of the redemption of the preference shares. The preference shares may be redeemed
after May 1, 2009 by Clidet 700, or after three years and one day from the issue date by Harmony.
Dividends are accumulated and are payable on the redemption date, if not paid before.
  (b)
    
    On April 3, 2006, Big Bell Gold Operations (Pty) Ltd, a subsidiary of Harmony Gold (Australia)
(Proprietary) Limited, received
 F-37




---



##### Table of Contents



(c)
    
    On December 8, 2006, the Group received 15,745,079 ordinary shares in Gold Fields, issued
at R135.02 (US$19.15) per share, in exchange for its interest in Western Areas. This was in terms
of the offer by Gold Fields to exchange every 100 Western Areas shares held for 35 Gold Fields
shares. Gold Fields is a mineral resources company, primarily gold, which is listed on the JSE and
has a secondary listing on the New York Stock Exchange.
   (d)
    
    On December 5, 2007, the Group concluded an agreement with Dioro Exploration NL (Dioro) to
sell its South Kal operation (Australia) in exchange for 11,428,571 shares in Dioro, constituting
an investment of 17.6%. At that date the shares were valued at US$18.9 million being A$1.75
(US$1.52) per share. The shares are listed on the Australian Securities Exchange. At year end the
shares were valued at A$0.74 (US$0.71), resulting in US$8.1 million being recognized in other comprehensive
income, net of tax.(e)
    
    Investments are held in various shares of unlisted industry-related companies. These
investments have been valued by the directors by performing independent valuations on an annual
basis to ensure that no permanent impairment in the value of the investments has occurred. During
the financial year under review, the Group did not receive any income from these investments (2007: Nil).(f)
    
    During the 2005 financial year, the Group transferred its remaining 13.68% of the investment in
ARM to the ARM Broad-Based Economic Empowerment Trust (the ARM Trust) for an aggregate cash
consideration of $132.1 million, representing a price of R29 (US$4.62) per ARM share.
    F-38




---



##### Table of Contents



20
    
    Investments in associates
 US DollarFigures in million
    
    2008
    
    
    2007Opening carrying amount
    
    
    1
    
    
    
    266Disposal of share in associate (a)
    
    
    
    
    
    
    (268
    )Joint venture becoming associate (c)
    
    
    
    
    
    
    1Shares acquired at cost (d)
    
    
    46
    
    
    
    Elimination of unrealized profits
    
    
    (5
    )
    
    
    Share of loss after tax
    
    
    (11
    )
    
    
    (3
    )Impairment of share in associate
    
    
    (12
    )
    
    
    Foreign currency translation reserve
    
    
    
    
    
    
    5Total investments in associates
    
    
    19
    
    
    
    1The carrying amount consists of the following:Village Main Reef Gold Mining Company Ltd (b)
    
    
    
    
    
    
    Orpheo (c)
    
    
    
    
    
    
    1Pamodzi Gold Limited (d)
    
    
    19
    
    
    
    Total investments in associates
    
    
    19
    
    
    
    1
 (a)
    
    On March 9, 2006, the Group acquired a 29.2% interest in the issued share capital of
Western Areas (44,985,939 shares) through its subsidiary, the ARMgold/Harmony Joint Investment
Company (Proprietary) Limited, for a total cost of US$321.4 million. Western Areas was listed on the JSE Limited,
with interests in operating gold mines in South Africa.
  (b)
    
    On June 21, 2006, Harmony acquired 37.8% of the issued share capital of Village Main Reef
Gold Mining Company (1934) Limited (Village) at a total cost of US$0.07 million. The equity stake
was purchased from ARM at a price of R0.20 (US$0.03) per share.
Village is listed on the JSE Limited in the gold sector and has been dormant for some time without
any operating mines.
    US DollarFigures in million
    
    2008
    
    
    2007100%
    
    
    100%Revenue
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    Total assets
    
    
    1
    
    
    
    1Total liabilities
    
    
    1
    
    
    
    
 (c)
    
    During 2007, the Group disposed of 17% of its share in Orpheo by Harmony (Proprietary) Limited
(Orpheo), which had been accounted for as a joint venture. After the transaction, the Group held
a 33% interest in Orpheo.
  F-39




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##### Table of Contents



US Dollar2008
    
    
    2007Figures in million
    
    100%
    
    
    100%Revenue
    
    
    1
    
    
    
    1Net profit
    
    
    
    
    
    
    Total assets
    
    
    1
    
    
    
    1Total liabilities
    
    
    1
    
    
    
    
 (d)
    
    On February 27, 2008, Pamodzi bought the Orkney operations from Harmony for a consideration of 30,000,000 Pamodzi shares. This resulted in Harmony owning
32.4% of Pamodzi. On the purchase date the value of the investment was R11.50 per share (US$1.54
per share) resulting in US$46.5 million investment. Pamodzi is
listed on the JSE Limited and has interests
in operating gold mines in South Africa.As at June 30, 2008 the fair value of the investment was calculated at US$18.6 million (R4.85
(US$0.62) per share). The carrying value exceeded the fair value and as a result, an impairment of
US$12.3 million was recognized. During the four months to June 2008, the Groups share of the post
acquisition losses was a loss of US$10.6 million.Pamodzi has a December 31 year-end and the latest audited financials are for the year ended
December 31, 2007. The unaudited financial information of Pamodzi for the period since acquisition
of the investment on February 27, 2008 to June 2008 and as
at June 30, 2008 are as follows:
 US Dollar2008Figures in million
    
    100%Revenue
    
    
    57Production costs
    
    
    (74
    )Operating loss
    
    
    (17
    )Net loss
    
    
    (34
    )Non-current assets
    
    
    214Current assets
    
    
    21Total assets
    
    
    235Current liabilities
    
    
    170Non-current liabilities
    
    
    31Total liabilities
    
    
    201
 21
    
    Investment in joint venture
   F-40




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##### Table of Contents



22
    
    Trade and other receivables
 US DollarFigures in million
    
    2008
    
    
    2007CurrentFinancial assets:Trade receivables (gold)
    
    
    30
    
    
    
    11Other trade receivables
    
    
    44
    
    
    
    20Provision for impairment
    
    
    (17
    )
    
    
    (3
    )Trade receivables  net
    
    
    57
    
    
    
    28Interest and other receivables
    
    
    9
    
    
    
    Employee receivables
    
    
    3
    
    
    
    8Insurance claims receivable
    
    
    
    
    
    
    16Deferred consideration for sale of Buffalo Creek (a)
    
    
    
    
    
    
    5Non-financial assets:Prepayments
    
    
    5
    
    
    
    5Value added tax
    
    
    38
    
    
    
    68Total current trade and other receivables
    
    
    112
    
    
    
    130Non-currentFinancial assets:Loans receivables (b)
    
    
    20
    
    
    
    10Provision for impairment
    
    
    (2
    )
    
    
    (2
    )Total non-current trade and other receivables
    
    
    18
    
    
    
    8
 (a)
    
    On March 31, 2006, the Group disposed of the entire share capital of Buffalo Creek for US$17.2
million. The last installment of the receivable was settled in cash on September 30, 2007.(b)
    
    Loans comprise various loans, which have been valued by the directors. These loans are
uncollateralized with interest charged at the South African prime
lending rate (prime). These loans are due
within two years. Included in this balance is US$13.2 million owed by an associate.  US DollarFigures in million
    
    2008
    
    
    2007Balance at July 1
    
    
    3
    
    
    
    2Impairment loss recognized
    
    
    14
    
    
    
    1Balance at June 30
    
    
    17
    
    
    
    3
  US DollarFigures in million
    
    2008
    
    
    2007Balance at July 1
    
    
    2
    
    
    
    Impairment loss recognized
    
    
    1
    
    
    
    2Loans written off during the year
    
    
    (1
    )
    
    
    Balance at June 30
    
    
    2
    
    
    
    2
 US DollarFigures in million
    
    Gross
    
    
    ImpairmentThe ageing of trade and other receivables at the reporting date was:June 30, 2008Fully performing
    
    
    51
    
    
    
    Past due by 1 to 30 days
    
    
    3
    
    
    
    Past due by 31 to 60 days
    
    
    
    
    
    
    Past due by 61 to 90 days
    
    
    1
    
    
    
    Past due by more than 90 days
    
    
    19
    
    
    
    17Balance at June 30, 2008
    
    
    74
    
    
    
    17
 F-41




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##### Table of Contents



US DollarFigures in million
    
    Gross
    
    
    ImpairmentJune 30, 2007Fully performing
    
    
    23
    
    
    
    Past due by 1 to 30 days
    
    
    1
    
    
    
    Past due by 31 to 60 days
    
    
    
    
    
    
    Past due by 61 to 90 days
    
    
    3
    
    
    
    Past due by more than 90 days
    
    
    5
    
    
    
    3Balance at June 30, 2007
    
    
    32
    
    
    
    3
 US DollarFigures in million
    
    Gross
    
    
    ImpairmentThe ageing of loans receivables at the reporting date was:June 30, 2008Fully performing
    
    
    18
    
    
    
    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
    
    
    
    2Balance at June 30, 2008
    
    
    20
    
    
    
    2June 30, 2007Fully performing
    
    
    8
    
    
    
    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
    
    
    
    2Balance at June 30, 2007
    
    
    10
    
    
    
    2
     23
    
    Inventories
 US DollarFigures in million
    
    2008
    
    
    2007Gold in lock-up
    
    
    26
    
    
    
    23Gold in-process and bullion on hand
    
    
    17
    
    
    
    49Stores and materials at weighted average cost
    
    
    46
    
    
    
    33Total inventories
    
    
    89
    
    
    
    105Gold in-process at the following operations is valued at net realizable value:Free State
    
    
    
    
    
    
    4Evander
    
    
    
    
    
    
    11Freegold
    
    
    
    
    
    
    12Target
    
    
    
    
    
    
    13Gold in-process carried at net realizable value
    
    
    
    
    
    
    40
  F-42




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##### Table of Contents



24
    
    Restricted cash
 US DollarFigures in million
    
    2008
    
    
    2007RMB margin call account (a)
    
    
    
    
    
    
    39Security deposits (b)
    
    
    
    
    
    
    2Cash Management Account (c)
    
    
    10
    
    
    
    Reclassified as current
    
    
    
    
    
    
    (39
    )Reclassified as non-current assets held for sale
    
    
    
    
    
    
    (1
    )Total restricted cash
    
    
    10
    
    
    
    1
 (a)
    
    In terms of the financing agreement with RMB, US$39 million was placed in a security
deposit account with RMB. Refer to note 28 (f).(b)
    
    The amount was held in respect of security deposits on mining tenements.(c)
    
    The amount relates to funds set aside by the International operations for performance bonds related
to guarantees for environmental obligations. 25
    
    Cash and cash equivalents
 US DollarFigures in million
    
    2008
    
    
    2007Cash at bank and deposits on call
    
    
    53
    
    
    
    101Overdraft facilities
    
    
    
    
    
    
    (31
    )Total cash and cash equivalents
    
    
    53
    
    
    
    70
 26
    
    Share capital
 Authorized
   Issued
    F-43




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##### Table of Contents



27 Other reserves
  US DollarFigures in million
    
    2008
    
    
    2007Foreign exchange translation reserve (a)
    
    
    (216
    )
    
    
    30Mark-to-market of available-for-sale financial instruments (b)
    
    
    (2
    )
    
    
    (44
    )Equity component of convertible bond (c)
    
    
    41
    
    
    
    41Acquisition of non-controlling interest in subsidiary (d)
    
    
    (57
    )
    
    
    (57
    )Deferred share-based payments (e)
    
    
    42
    
    
    
    36Other
    
    
    (4
    )
    
    
    (4
    )Total other reserves
    
    
    (196
    )
    
    
    2The different categories are made up as follows:Foreign exchange translation reserveAt the beginning of the year
    
    
    30
    
    
    
    (57
    )Current years foreign exchange movement
    
    
    (246
    )
    
    
    87At the end of the year
    
    
    (216
    )
    
    
    30Mark-to-market of available-for-sale financial assetsAt the beginning of the year
    
    
    (44
    )
    
    
    2Realized portion reclassified through profit or loss
    
    
    47
    
    
    
    4Mark-to-market  unrealized
    
    
    (9
    )
    
    
    (50
    )Deferred tax asset
    
    
    4
    
    
    
    At the end of the year
    
    
    (2
    )
    
    
    (44
    )Equity component of convertible bondAt the beginning/end of the year
    
    
    41
    
    
    
    41Acquisition of non-controlling interest in subsidiaryAt the beginning/end of the year
    
    
    (57
    )
    
    
    (57
    )Deferred share-based paymentsAt the beginning of the year
    
    
    36
    
    
    
    30Share-based payments expensed
    
    
    6
    
    
    
    6At the end of the year
    
    
    42
    
    
    
    36Other reservesAt the beginning/end of the year
    
    
    (4
    )
    
    
    (4
    )
 (a)
    
    The movement of the foreign exchange translation reserve represents the cumulative
translation effect of the Groups off-shore operations. It also includes the translation effect
from Rand to US Dollar.(b)
    
    The balance of the mark-to-market reserve represents the movement in the fair value of
the available-for-sale financial assets. For details on the movement, refer to note 19.(c)
    
    On May 21, 2004, the Group issued a convertible bond. As a result, an amount representing
the value of the equity conversion component is included in other reserves, net of deferred tax.
The equity conversion component is determined on the issue of the bonds and is not changed in
subsequent periods. Refer to note 28 (a) for more detail.(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 (A$123 million) over the carrying amount of
non-controlling interests acquired, amounting to US$55 million, has been accounted for under other
reserves.
 F-44




---



##### Table of Contents



(e)
    
    The Group issues equity-settled instruments to certain qualifying employees under an Employee
Share Option Scheme to purchase shares in the Companys authorized but unissued ordinary shares.
Equity share-based payments are measured at the fair value of the equity instruments at the date
of the grant. Share-based payment are expensed over the vesting period, based on the Groups
estimate of the shares that are expected to eventually vest. During 2008 a share-based payment
expense of US$5.9 million (2007: US$6.3 million) was charged to the income statement. (Refer to
note 35 for more detail.)
 28 Borrowings
 US DollarFigures in million
    
    2008
    
    
    2007Uncollateralized borrowingsConvertible uncollateralized fixed rate bonds (a)
    
    
    
    
    
    
    219Principal amount
    
    
    218
    
    
    
    241Equity conversion component, net of deferred tax liability
    
    
    (41
    )
    
    
    (41
    )Deferred tax liability
    
    
    (9
    )
    
    
    (9
    )Liability component on initial recognition
    
    
    168
    
    
    
    191Unwinding of time value of money portion
    
    
    40
    
    
    
    29Less: amortized bond issue costs
    
    
    (1
    )
    
    
    (2
    )Translation
    
    
    1
    
    
    
    1208
    
    
    
    219Less: current portion
    
    
    (208
    )
    
    
    Africa Vanguard Resources (Proprietary) Limited (b)
    
    
    4
    
    
    
    5Total uncollateralized long-term borrowings
    
    
    4
    
    
    
    224Collateralized borrowingsNedbank Limited (c)
    
    
    
    
    
    
    24Liability amount
    
    
    25
    
    
    
    24Less: current portion
    
    
    (25
    )
    
    
    Nedbank Limited (d)
    
    
    
    
    
    
    Liability amount
    
    
    
    
    
    
    85Less: current portion
    
    
    
    
    
    
    (85
    )Nedbank Limited (e)
    
    
    
    
    
    
    Liability amount
    
    
    
    
    
    
    64Less: current portion
    
    
    
    
    
    
    (64
    )Rand Merchant Bank (f)
    
    
    
    
    
    
    Liability amount
    
    
    
    
    
    
    107Less: current portion
    
    
    
    
    
    
    (107
    )Rand Merchant Bank (g)
    
    
    
    
    
    
    Liability amount
    
    
    
    
    
    
    78Less: current portion
    
    
    
    
    
    
    (78
    )Rand Merchant Bank (h)
    
    
    
    
    
    
    Liability amount
    
    
    
    
    
    
    71Less: current portion
    
    
    
    
    
    
    (71
    )
 F-45




---



##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007Westpac Bank (i)
    
    
    27
    
    
    
    Liability amount
    
    
    33
    
    
    
    Less: current portion
    
    
    (6
    )
    
    
    Nedbank Limited (j)
    
    
    
    
    
    
    Principal amount
    
    
    256
    
    
    
    Less: amortized issue costs
    
    
    (1
    )
    
    
    255
    
    
    
    Less: current portion
    
    
    (255
    )
    
    
    Total uncollateralized long-term borrowings
    
    
    27
    
    
    
    24Total long-term borrowings
    
    
    31
    
    
    
    248Total current portion of borrowings
    
    
    494
    
    
    
    405Total borrowings
    
    
    525
    
    
    
    653
 (a)
    
    On May 21, 2004, Harmony issued an international uncollateralized fixed rate convertible bond
in an aggregate principal amount of US$251.9 million. Interest at a rate of 4.875% per annum is
payable semi-annually in arrears on May 21 and November 21 of each year, commencing November 21,
2004. The bonds mature five years from the issue date at their nominal value of US$218 million
unless converted into the Companys ordinary shares. The bonds are convertible at the option of
the bondholders at any time on or after July 1, 2004 and up to and including May 15, 2009, unless
previously redeemed, converted or purchased and cancelled, into fully paid ordinary shares. The
number of ordinary shares to be issued at such a conversion shall be determined by dividing the
principal amount of each bond by the conversion price in effect on the relevant conversion date.
The initial conversion price is R121 (US$15.51) per ordinary share subject to certain standard
anti-dilutive provisions such as a rights offering, that are designed to maintain the value of the
conversion option. The fair values of the liability component and the equity conversion component
were determined on the issue of the bond. The fair value of the liability component, included in
long term borrowings, was calculated using a market interest rate for an equivalent
non-convertible bond (10%).The residual amount, representing the value of the equity conversion component, is included
in other reserves net of deferred taxes. In subsequent periods, the liability component continues
to be presented on the amortized cost basis, until extinguished on conversion or maturity of the
bonds. The equity conversion component is determined on the issue of the bonds and is not changed
in subsequent periods. The bonds are listed on the London Stock Exchange for Bonds. The terms and
conditions of the bonds prohibit Harmony and its material subsidiaries from creating any
encumbrance or security interest over any of its assets to secure any relevant debt (defined as
bonds, notes, debentures, loan stock or other securities which are tradable on a securities
market) without according the same security to the bondholders or without obtaining the prior
approval of the bondholders. Included in the amortization charge as per the income statement is
US$1.2 million (2007: US$1.2 million) for amortization of the bond issue costs.(b)
    
    The loan to Africa Vanguard Resources (Doornkop) (Proprietary) Limited (AVRD) from its
holding company African Vanguard Resources (Proprietary) Limited remained unchanged from the
previous year. In 2005 AVRD borrowed an additional R18 million (US$2.3 million) to service working
capital commitments. This increased the initial
loan of US$1.8 million to US$4.1 million. The loan is unsecured and interest free, with no fixed
terms of repayment over the short term. Refer to note 28 (c).(c)
    
    On July 30, 2003, AVRD entered into a term loan facility of US$19.1 million with Nedbank
Limited for the purpose of partially funding AVRDs purchase of an undivided 26% share of the
Mining titles, to be contributed to the Doornkop South Reef project. Interest at a variable rate
equal to JIBAR plus 2% shall be repayable to the extent that AVRD received a portion of the profit
from the project. Unpaid interest shall be capitalized and repaid with the loan amount. The loan
amount and any interest accrued is repayable on July 30, 2008. Interest capitalized during the
year ended June 30, 2008 amounted to US$4.1 million (2007: US$2.2 million).The facility from Nedbank to AVRD is guaranteed by Harmony and certain of its subsidiaries.
As a result of this guarantee and other factors, the Group is required to consolidate AVRD and has
therefore included the loans from Nedbank and Africa Vanguard Resources (Proprietary) Limited  in
its consolidated borrowings.(d)
    
    On April 15, 2005, the ARM Trust entered into a term loan facility of
US$75.4 million with Nedbank for the purpose of funding the
balance of the ARM Trusts
acquisition of the shares the Group held in ARM. The loan bears interest, compounded monthly, at a
rate of JIBAR plus 1.5% per annum. Interest capitalized during the year ended June 30, 2008
amounted to US$2.5 million (2007: US$8.6 million) (refer to note 12). On September 28, 2007, the
ARM Trust guarantee was cancelled by Nedbank and consequently Harmony has no further obligation to
Nedbank in this regard. The ARM investment and associated Nedbank loans was deconsolidated from
this date. Refer to note 19 (f).
 F-46




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##### Table of Contents



(e)
    
    On April 15, 2005, the ARM Trust entered into a second term loan facility of US$56.7 million with
Nedbank for the purpose of funding the ARM Trusts partial acquisition of the shares the
Company held in ARM (Refer note 19 (f)). The loan bears interest, compounded monthly, at a rate of
JIBAR plus 1.5% per annum. Interest capitalized during the year ended June 30, 2008 amounted to
US$2.1 million (2007: US$6.8 million) (refer to note 12). The loan is repayable on the 5th
anniversary of the advance date. On September 28, 2007, the loan was consolidated as per note 28
(d).(f)
    
    During March 2007, the Group entered into a financing agreement with RMB. In terms of the
financing agreement, 5,747,000 Gold Fields ordinary shares were pledged as collateral. The
financing amounted to US$103.4 million. Of this amount, US$82.3 million was used to repay a
portion of the term loan obtained in March 2006.Interest is payable to RMB at a rate equal to the SAFEX Financial Derivatives overnight
deposit rate (SAFEX overnight rate) plus 35 basis points.The Group placed a 20% deposit of the notional amount with RMB in an initial margin account
for any change in the Gold Fields share price below the reference price of R130.88 (US$17.81) per
share. Interest is payable by RMB to the Group at the SAFEX overnight rate less 15 basis points.On August 24, 2007, the Group entered into an agreement to sell its Gold Fields ordinary
shares for a consideration of US$185 million. The proceeds were used to settle the Randfontein
redeemable preference shares issued to RMB in April 2007, as well as the financing arranged with
RMB in March 2007. Refer to note 28 (g).(g)
    
    During April 2007, Randfontein Estates Limited (Randfontein) (a wholly owned subsidiary of
Harmony) issued 55,000,000 cumulative, floating rate, redeemable preference shares to RMB for
US$75.4 million. US$54.9 million of the consideration was used to repay a portion of the term loan
obtained in March 2006. The obligation to redeem the preference shares is secured by the cession
of shares in Gold Fields in a ratio of 1.5:1.The preference shares are redeemable on the date that falls three years and a day after the
issue date, but may be redeemed by Randfontein at any time before this date . The amount to be
redeemed is the issue price together with any accumulated dividends and dividends that have been
declared but not paid.The first dividend date is March 1, 2008. The dividend rate is variable and is set out as
follows:- for the period from the issue date until August 31, 2007, the variable dividend rate is
equal to 35% of the prime rate;- for the period from September 1, 2007 until February 29, 2008, the variable dividend rate
is equal to 50% of the prime rate;- on March 1, 2008, the variable dividend rate is equal to 83% of the prime rate.In August 2007, the preference shares were redeemed as per note 28 (f).(h)
    
    On June 29, 2007, RMB advanced US$68.6 million in terms of a short term bridging loan. The
loan became due on July 31, 2007 along with interest, calculated at the rate equal to the SAFEX
overnight rate plus 2.4%. In the event that Harmony elected to extend the loan facility until
September 30, 2007, the interest would be calculated at the rate equal to the SAFEX overnight rate
plus 3.6% during the extension period.On September 29, 2007, the short term bridging loan from
RMB was repaid. Refer to note 28 (j)
for details on the funds utilized.(i)
    
    During July 2007, Morobe Consolidated Goldfields entered into a finance lease agreement with
Westpac Bank for the purchase of mining fleet to be used on the Hidden Valley project.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.
 US DollarFigures in million
    
    2008
    
    
    2007The future minimum lease payments are as follows:Due within one year
    
    
    7
    
    
    
    Due between one and two years
    
    
    7
    
    
    
    Due between two and five years
    
    
    23
    
    
    
    37
    
    
    
    Future finance charges
    
    
    (4
    )
    
    
    33
    
    
    
    
 (j)
    
    On September 28, 2007, Harmony entered into a term loan facility of US$283.9 million with
Nedbank, for the purpose of partially funding capital expenditure in respect of projects,
as well as to repay the short term bridging loan amounting to US$68.6 million (refer to note 28
(h)). Interest accrues on a day to day basis over the term of the
loan at a variable interest
 F-47




---



##### Table of Contents



rate, which is fixed for three month periods, equal to the JIBAR plus 2.75% plus banking costs. The loan is
repayable on December 29, 2008 and interest is repayable every quarter commencing on September 28,
2007.
  US DollarFigures in million
    
    2008
    
    
    2007Variable rate
    
    
    27
    
    
    
    24Current
    
    
    494
    
    
    
    405Between 1 to 2 years
    
    
    
    
    
    
    219Between 2 to 5 years
    
    
    
    
    
    
    Over 5 years
    
    
    4
    
    
    
    5Total borrowings
    
    
    525
    
    
    
    653Variable rate
    
    
    5.1
    %
    
    
    3.7
    %Current
    
    
    94.1
    %
    
    
    62.1
    %Between 1 to 2 years
    
    
    0.0
    %
    
    
    33.5
    %Between 2 to 5 years
    
    
    0.0
    %
    
    
    0.0
    %Over 5 years
    
    
    0.8
    %
    
    
    0.7
    %Total borrowings
    
    
    100.0
    %
    
    
    100.0
    %The maturity of borrowings is as follows:Current
    
    
    494
    
    
    
    405Between 1 to 2 years
    
    
    6
    
    
    
    243Between 2 to 5 years
    
    
    21
    
    
    
    Over 5 years
    
    
    4
    
    
    
    5Total borrowings
    
    
    525
    
    
    
    653
 2008
    
    2007Convertible unsecured fixed rate bonds (a)
    
    
    10.0
    %
    
    
    10.0
    %Africa Vanguard Resources (Proprietary) Limited (b)
    
    
    0.0
    %
    
    
    0.0
    %Nedbank Limited (c)
    
    
    13.4
    %
    
    
    11.9
    %Nedbank Limited (d)*
    
    
    0.0
    %
    
    
    9.5
    %Nedbank Limited (e)*
    
    
    0.0
    %
    
    
    10.0
    %Rand Merchant Bank (f)*
    
    
    0.0
    %
    
    
    9.4
    %Rand Merchant Bank (g)*
    
    
    0.0
    %
    
    
    4.6
    %Rand Merchant Bank (h)*
    
    
    0.0
    %
    
    
    12.7
    %Westpac Bank (i)
    
    
    4.1
    %
    
    
    0.0
    %Nedbank Limited (j)
    
    
    14.5
    %
    
    
    0.0
    %
 
 *
    
    Loan repaid in full
  F-48




---



##### Table of Contents



29
    
    Provision for environmental rehabilitation
  US DollarFigures in million
    
    2008
    
    
    2007Provision raised for future rehabilitationOpening balance
    
    
    192
    
    
    
    120Disposal of assets
    
    
    (16
    )
    
    
    (4
    )Change in estimate  Balance sheet
    
    
    12
    
    
    
    53Change in estimate  Income statement
    
    
    1
    
    
    
    (1
    )Inflation present value adjustment and time value of money component
    
    
    22
    
    
    
    17Foreign currency translation adjustments
    
    
    (15
    )
    
    
    7Closing balance
    
    
    196
    
    
    
    192Provision associated with non-current assets held for sale
    
    
    (51
    )
    
    
    (36
    )145
    
    
    
    156
   Future net obligationsUltimate estimated rehabilitation cost
    
    
    269
    
    
    
    276Amounts
invested in Environmental trust funds (note 18)*
    
    
    (206
    )
    
    
    (198
    )Total future obligations
    
    
    63
    
    
    
    78
  *
    
    This includes amounts related to non-current assets held for sale.
 30
    
    Provision for other liabilities and charges
 US DollarFigures in million
    
    2008
    
    
    2007Non-currentRetirement benefit obligation (Refer to note 33)
    
    
    17
    
    
    
    15Other
    
    
    1
    
    
    
    3Closing balance
    
    
    18
    
    
    
    18
 F-49




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##### Table of Contents



31
    
    Trade and other payables
 US DollarFigures in million
    
    2008
    
    
    2007Financial liabilitiesTrade payables
    
    
    86
    
    
    
    88Other liabilities
    
    
    8
    
    
    
    8Non-financial liabilitiesPayroll accruals
    
    
    37
    
    
    
    65Leave liabilities
    
    
    27
    
    
    
    34Shaft related accruals
    
    
    16
    
    
    
    17Other accruals
    
    
    21
    
    
    
    21Value added tax
    
    
    6
    
    
    
    17Taxation
    
    
    12
    
    
    
    7Total trade and other payables
    
    
    213
    
    
    
    257
  US DollarFigures in million
    
    2008
    
    
    2007At the beginning of the year
    
    
    36
    
    
    
    31Benefits paid
    
    
    (38
    )
    
    
    (26
    )Foreign currency translation adjustments
    
    
    (1
    )
    
    
    Total expense per income statement
    
    
    32
    
    
    
    3129
    
    
    
    36Reclassified as non-current assets held for sale
    
    
    (2
    )
    
    
    (2
    )At the end of the year
    
    
    27
    
    
    
    34
 32
    
    Cash generated by operations
  US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Profit/(loss) before taxation
    
    
    33
    
    
    
    90
    
    
    
    (58
    )Adjustments for:Amortization and depreciation
    
    
    123
    
    
    
    163
    
    
    
    171Impairment/(reversal of impairment) of assets
    
    
    36
    
    
    
    38
    
    
    
    (30
    )Loss/(gain) on financial instruments
    
    
    1
    
    
    
    (6
    )
    
    
    82Profit on sale of mining assets
    
    
    (15
    )
    
    
    (25
    )
    
    
    (10
    )Net increase/(decrease) in provision for post retirement benefits
    
    
    1
    
    
    
    (2
    )
    
    
    1Net increase/(decrease) in provision for environmental rehabilitation
    
    
    2
    
    
    
    (1
    )
    
    
    (3
    )Loss from associates
    
    
    11
    
    
    
    3
    
    
    
    17Impairment of investment in associate
    
    
    12
    
    
    
    
    
    
    
    Share-based payments
    
    
    6
    
    
    
    6
    
    
    
    16Fair value of non-derivative financial instrument
    
    
    (4
    )
    
    
    (15
    )
    
    
    (14
    )Loss/(profit) on sale of listed investments
    
    
    63
    
    
    
    3
    
    
    
    (45
    )Profit on sale of subsidiary
    
    
    
    
    
    
    
    
    
    
    (2
    )Profit on sale of investment in associate
    
    
    
    
    
    
    (33
    )
    
    
    Dividends received
    
    
    (5
    )
    
    
    (3
    )
    
    
    (3
    )Interest received
    
    
    (38
    )
    
    
    (25
    )
    
    
    (33
    )Interest paid  cash
    
    
    57
    
    
    
    31
    
    
    
    32Interest paid  non cash
    
    
    19
    
    
    
    35
    
    
    
    39Cost on closure of hedge positions
    
    
    
    
    
    
    (80
    )
    
    
    (54
    )Other non cash transactions
    
    
    
    
    
    
    (15
    )
    
    
    (14
    )
 F-50




---



##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Effect of changes in operating working capital items:Receivables
    
    
    4
    
    
    
    (27
    )
    
    
    (9
    )Inventories
    
    
    7
    
    
    
    (30
    )
    
    
    (6
    )Accounts payable and accrued liabilities
    
    
    (45
    )
    
    
    57
    
    
    
    (24
    )Cash generated by operations
    
    
    268
    
    
    
    164
    
    
    
    53
 Additional cash flow information
   US DollarFigures in million
    
    2008For the year ended June 2008On 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:Property, 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
    
    
    18On February 27, 2008, the Group disposed of its assets and liabilities in its Orkney operations to Pamodzi. The aggregate fair value of assets and liabilities sold
were:Property, plant and equipment
    
    
    38Rehabilitation trust fund
    
    
    4Leave liability
    
    
    (2
    )Provision for environmental rehabilitation liability
    
    
    (7
    )Profit on disposal
    
    
    13Disposal proceeds
    
    
    46Proceeds received by way of shares
    
    
    (46
    )Cash and cash equivalent at disposal
    
    
    
  US DollarFigures in million
    
    2007For the year ended June 2007On May 28, 2007, the Group disposed of 17% of its 50% share in Orpheo to AngloGold Ashanti Limited. The aggregate fair value of the assets acquired and liabilities assumed, and
subsequently disposed of, were :Inventories
    
    
    Property, plant and equipment
    
    
    1Investment in associate
    
    
    (1
    )Accounts payable and accrued liabilities
    
    
    Total purchase price
    
    
    Proceeds received by way of accounts receivable
    
    
    Cash and cash equivalents at disposal
    
    
    
  F-51




---



##### Table of Contents



US DollarFigures in million
    
    2006For the year ended June 2006On July 1, 2005, the Group acquired a 50% share in Orpheo. The aggregate fair value of the assets acquired and liabilities assumed were:Inventories
    
    
    Property, plant and equipment
    
    
    1Accounts payable and accrued liabilities
    
    
    Total purchase price
    
    
    1Paid for by way of accounts payable
    
    
    (1
    )Cash and cash equivalents at acquisition
    
    
    On December 20, 2005, the Group acquired a 45% share in MP Britz and H. Taute Pharmacies through its joint venture agreement with Healthshare. The aggregate
fair value of the assets acquired and liabilities assumed were:Inventories
    
    
    Accounts receivable
    
    
    Property, plant and equipment
    
    
    Intangible assets
    
    
    1Accounts payable and accrued liabilities
    
    
    (1
    )Total purchase price
    
    
    Paid for by way of accounts payable
    
    
    Cash and cash equivalents at acquisition
    
    
    On March 31, 2006, the Group disposed of its shareholding in Buffalo Creek. The aggregate fair value of the assets and liabilities sold were:Inventories
    
    
    Property, plant and equipment
    
    
    18Deferred tax
    
    
    (3
    )Provision for rehabilitation liability
    
    
    Accounts payable and accrued liabilities
    
    
    Foreign exchange
    
    
    Profit on disposal sale of subsidiary
    
    
    2Disposal proceeds
    
    
    17Proceeds received by way of accounts receivable
    
    
    (10
    )Proceeds received by way of shares
    
    
    (4
    )Proceeds received by way of cash
    
    
    3
  33
    
    Retirement benefit obligations
 Pension
and provident funds:
    F-52




---



##### Table of Contents



Post-retirement benefits other than pension:
    US DollarFigures in million
    
    2008
    
    
    2007Present value of unfunded obligations
    
    
    17
    
    
    
    15Movement in the liability recognized in the balance sheetOpening balance as previously stated
    
    
    15
    
    
    
    15Contributions paid
    
    
    
    
    
    
    Other expenses included in staff costs/current service cost
    
    
    1
    
    
    
    1Interest cost
    
    
    1
    
    
    
    1Net actuarial loss/(gains) recognized during the year
    
    
    2
    
    
    
    (2
    )Foreign currency translation reserve
    
    
    (2
    )
    
    
    Balance at the end of the year
    
    
    17
    
    
    
    15The principal actuarial assumptions used for accounting purposes were:Discount rate
    
    
    12.0
    %
    
    
    9.0
    %Healthcare inflation rate
    
    
    9.8
    %
    
    
    6.3
    %Normal retirement age
    
    
    60
    
    
    
    60The history of the defined benefit plan is as follows:Present value of defined benefit obligation
    
    
    17
    
    
    
    15Fair value of plan assets
    
    
    
    
    
    
    Net liability
    
    
    17
    
    
    
    15
   US DollarFigures in million
    
    2008
    
    
    20071%
    
    
    1%Increase /
    
    
    Increase /decrease
    
    
    decreaseEffect on:Aggregate of service cost and interest cost
    
    
    
    
    
    
    Defined benefit obligation
    
    
    3
    
    
    
    3
  F-53




---



##### Table of Contents



34
    
    Employee benefits
 Number of permanent employees as at June 30:
    
    2008
    
    
    2007South Africa operations*
    
    
    36,839
    
    
    
    41,118International operations**
    
    
    871
    
    
    
    466Total
    
    
    37,710
    
    
    
    41,584
 US DollarFigures in million
    
    2008
    
    
    2007Aggregate earnings:The aggregate earnings of employees including directors were:Salaries and wages and other benefits
    
    
    584
    
    
    
    432Retirement benefit costs
    
    
    47
    
    
    
    42Medical aid contributions
    
    
    10
    
    
    
    9Total aggregate earnings
    
    
    641
    
    
    
    483
 Directors remuneration
   
 *
    
    The employees attributable to the discontinued operations were 3 618 (2007: 6 313).**
    
    The total employees at Australian operations at 30 June 2008 was 873 (2007: 695). Of this total, 2 employees (2007: 229) were attributable to the discontinued operations. 35
    
    Share option schemes
  The options granted under the 2001 and 2003 schemes
    Number of share options relating to the 2001 and 2003 option schemes
    
    2008
    
    
    2007Share options granted
    
    
    28,442,420
    
    
    
    28,442,420Exercised
    
    
    17,249,668
    
    
    
    15,485,536Vested but not exercised
    
    
    1,792,796
    
    
    
    1,843,156Unvested
    
    
    2,735,443
    
    
    
    6,286,513Forfeited and lapsed
    
    
    6,664,513
    
    
    
    4,827,215Vesting periods of unvested options:Within one year
    
    
    1,367,722
    
    
    
    2,186,819One to two years
    
    
    1,367,721
    
    
    
    2,049,847Two to three years
    
    
    
    
    
    
    2,049,847Total number of unvested options
    
    
    2,735,443
    
    
    
    6,286,513
 F-54




---



##### Table of Contents



Weighted averageoption priceActivity on share options granted but not yet exercised
    
    Shares
    
    
    (Rand)For the year ended June 30, 2007Balance at beginning of year
    
    
    12,543,207
    
    
    
    49.38Options exercised
    
    
    (2,627,249
    )
    
    
    51.82Options forfeited and lapsed
    
    
    (1,786,289
    )
    
    
    50.37Closing balance
    
    
    8,129,669
    
    
    
    48.38For the year ended June 30, 2008Balance at beginning of year
    
    
    8,129,669
    
    
    
    48.38Options exercised
    
    
    (1,764,132
    )
    
    
    49.16Options forfeited and lapsed
    
    
    (1,837,298
    )
    
    
    45.77Closing balance
    
    
    4,528,239
    
    
    
    49.14
 At June 30,
    
    
    Option price
    
    
    Remaining lifeList of options granted but not yet exercised (listed by grant date)
    
    2008
    
    
    (Rand)
    
    
    (years)April 24, 2001
    
    
    21,000
    
    
    
    36.50
    
    
    
    2.8November 20, 2001
    
    
    221,260
    
    
    
    49.60
    
    
    
    3.4September 23, 2002
    
    
    33,768
    
    
    
    66.00
    
    
    
    4.2March 27, 2003
    
    
    261,000
    
    
    
    91.60
    
    
    
    4.7August 10, 2004
    
    
    1,066,713
    
    
    
    66.15
    
    
    
    6.1April 26, 2005
    
    
    2,924,498
    
    
    
    39.00
    
    
    
    6.8Total option granted but not yet exercised
    
    
    4,528,239
  List of options granted but not yet vested (listed by grant date)
    
    2008
    
    
    2007September 23, 2002
    
    
    
    
    
    
    35,371March 27, 2003
    
    
    
    
    
    
    101,600August 10, 2004
    
    
    817,660
    
    
    
    1,763,665April 26, 2005
    
    
    1,917,783
    
    
    
    4,385,877Total options granted but not yet vested
    
    
    2,735,443
    
    
    
    6,286,513
 US DollarFigures in million
    
    2008
    
    
    2007Average market price of options traded during the year
    
    
    22
    
    
    
    40Average fair value of share options vested during the year
    
    
    41
    
    
    
    72Share-based payments
    
    
    
    
    
    
    5
 Option allocationMarch 27, 2003
    
    
    August 10, 2004
    
    
    April 26, 2005The share-based payments are calculated using the binominal valuation model based on the following assumptions at grant date:Price at date of grant (SA Rand per share)
    
    
    91.60
    
    
    
    66.15
    
    
    
    39.00Risk-free interest rate:
    
    
    11.6
    %
    
    
    9.9
    %
    
    
    8.4
    %Expected volatility:
    
    
    45.0
    %
    
    
    40.0
    %
    
    
    35.0
    %Expected dividend yield:
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Vesting period:
    
    5 years
    
    5 years
    
    5 years
 F-55




---



##### Table of Contents



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;
    
    And then settled in cash or shares after the deduction of any tax payable.
  Number of shares relating to the 2006 share plan at June 30
    
    2008
    
    
    2007Shares granted
    
    
    4,676,720
    
    
    
    1,481,107Unvested
    
    
    4,236,938
    
    
    
    1,468,510Performance shares
    
    
    1,341,444
    
    
    
    538,516Share appreciation rights
    
    
    2,895,494
    
    
    
    929,994Shares forfeited
    
    
    439,782
    
    
    
    12,597Performance shares
    
    
    170,658
    
    
    
    Share appreciation rights
    
    
    269,124
    
    
    
    12,597Vesting periods of unvested shares granted:One to two years
    
    
    603,399
    
    
    
    Two to three years
    
    
    1,932,502
    
    
    
    848,514Three to four years
    
    
    965,165
    
    
    
    309,998Four to five years
    
    
    735,872
    
    
    
    309,998Total number of unvested shares granted
    
    
    4,236,938
    
    
    
    1,468,510
 F-56




---



##### Table of Contents



Weighted averageoption priceActivity on PS and SARs granted but not yet exercised
    
    Shares
    
    
    (Rand)For the year ended June 30, 2007Opening balance
    
    
    Performance shares
    
    
    
    
    
    
    n/aShare appreciation rights
    
    
    
    
    
    
    Options granted
    
    
    1,481,107Performance shares
    
    
    538,516
    
    
    
    n/aShare appreciation rights
    
    
    942,591
    
    
    
    112.64Options lapsed
    
    
    (12,597
    )Performance shares
    
    
    
    
    
    
    n/aShare appreciation rights
    
    
    (12,597
    )
    
    
    112.64Closing balance
    
    
    1,468,510Performance shares
    
    
    538,516
    
    
    
    n/aShare appreciation rights
    
    
    929,994
    
    
    
    112.64For the year ended June 30, 2008Opening balance
    
    
    1,468,510Performance shares
    
    
    538,516
    
    
    
    n/aShare appreciation rights
    
    
    929,994
    
    
    
    112.64Options granted
    
    
    3,195,613Performance shares
    
    
    973,586
    
    
    
    n/aShare appreciation rights
    
    
    2,222,027
    
    
    
    71.19Options lapsed
    
    
    (427,185
    )Performance shares
    
    
    (170,658
    )
    
    
    n/aShare appreciation rights
    
    
    (256,527
    )
    
    
    110.27Closing balance
    
    
    4,236,938Performance shares
    
    
    1,341,444
    
    
    
    n/aShare appreciation rights
    
    
    2,895,494
    
    
    
    81.04
 At June 30,
    
    
    Strike price
    
    
    Remaining lifeList of shares granted but not yet exercised (listed by grant date)
    
    2008
    
    
    (Rand)
    
    
    (years)Performance sharesNovember 15, 2006
    
    
    374,106
    
    
    
    n/a
    
    
    
    1.4November 15, 2007
    
    
    955,030
    
    
    
    n/a
    
    
    
    2.4March 7, 2008
    
    
    12,308
    
    
    
    n/a
    
    
    
    2.7Share appreciation rightsNovember 15, 2006
    
    
    687,880
    
    
    
    112.64
    
    
    
    4.4November 15, 2007
    
    
    2,161,460
    
    
    
    70.54
    
    
    
    5.4March 7, 2008
    
    
    46,154
    
    
    
    102.00
    
    
    
    5.7Total option granted but not yet exercised
    
    
    4,236,938
  US DollarFigures in millions
    
    2008
    
    
    2007Share-based payments
    
    
    5
    
    
    
    1
 Performanceshares
    
    
    SARsThe share-based cost is calculated using the Monte Carlo simulation, based on the following assumptions at grant date.Price at date of grant (SA Rand per share)- November 15, 2006 share allocation
    
    
    n/a
    
    
    
    112.64- November 15, 2007 share allocation
    
    
    n/a
    
    
    
    70.54- March 7, 2008 share allocation
    
    
    n/a
    
    
    
    102.00Risk-free interest rate:- November 15, 2006 share allocation
    
    
    9.6
    %
    
    
    8.8
    %- November 15, 2007 share allocation (valuation date December 21, 2007)
    
    
    10.8
    %
    
    
    9.8
    %
 F-57




---



##### Table of Contents



Performanceshares
    
    
    SARs- November 15, 2007 share allocation (valuation date April 21, 2008)
    
    
    11.7
    %
    
    
    10.7
    %- March 7, 2008 share allocation
    
    
    11.0
    %
    
    
    10.4
    %Expected volatility*:- November 15, 2006 share allocation
    
    
    34.7
    %
    
    
    26.4
    %- November 15, 2007 share allocation (valuation date December 21, 2007)
    
    
    46.3
    %
    
    
    35.1
    %- November 15, 2007 share allocation (valuation date April 21, 2008)
    
    
    49.5
    %
    
    
    41.7
    %- March 7, 2008 share allocation
    
    
    50.5
    %
    
    
    54.5
    %Expected dividend yield:- November 15, 2006 share allocation
    
    
    0.0
    %
    
    
    0.0
    %- November 15, 2007 share allocation (valuation date December 21, 2007)
    
    
    0.0
    %
    
    
    0.0
    %- November 15, 2007 share allocation (valuation date April 21, 2008)
    
    
    0.0
    %
    
    
    0.0
    %- March 7, 2008 share allocation
    
    
    0.0
    %
    
    
    0.0
    %Vesting period (from grant date):- November 15, 2006 share allocation
    
    3 years
    
    5 years- November 15, 2007 share allocation
    
    3 years
    
    5 years- March 7, 2008 share allocation
    
    3 years
    
    5 years
    
    
    that the Groups headline earnings per share have grown since the allocation date by a minimum of CPIX plus 3%;
    
    that the Groups performance has since the allocation date been a satisfactory achievement in terms of the Companys
sustainability index.
 
 *
    
    The volatility is measured as an annualized 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. 36
    
    Related parties
      37
    
    Commitments and Contingencies
 US DollarFigures in million
    
    2008
    
    
    2007Capital expenditure commitmentsContracts for capital expenditure
    
    
    149
    
    
    
    50Authorized by the directors but not contracted for
    
    
    221
    
    
    
    267Total capital commitments
    
    
    370
    
    
    
    317This expenditure will be financed from existing resources and where appropriate, borrowings.
 F-58




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007Contingent liabilitiesGuarantees and suretyships
    
    
    2
    
    
    
    3Environmental guarantees
    
    
    22
    
    
    
    1824
    
    
    
    21
  F-59




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##### Table of Contents



38
    
    Third year balance sheet
  US DollarFigures in million
    
    2005AssetsNon-current assetsProperty, plant and equipment (a)
    
    
    3,385Intangible assets
    
    
    340Restricted cash
    
    
    8Restricted investments
    
    
    176Investments in financial assets
    
    
    448Deferred tax
    
    
    9Total non-current assets
    
    
    4,366Current assetsInventories
    
    
    87Trade and other receivables
    
    
    96Income and mining taxes
    
    
    4Cash and cash equivalents
    
    
    265Total current assets
    
    
    452Total assets
    
    
    4,818Equity and liabilitiesShare capital and reservesShare capital
    
    
    3,700Other reserves
    
    
    135Accumulated loss
    
    
    (346
    )Total equity
    
    
    3,489Non-current liabilitiesBorrowings
    
    
    363Deferred tax (b)
    
    
    339Derivative financial instruments
    
    
    58Provision for environmental rehabilitation
    
    
    126Provisions for other liabilities and charges
    
    
    15Total non-current liabilities
    
    
    901Current liabilitiesTrade and other payables
    
    
    228Borrowings
    
    
    200Total current liabilities
    
    
    428Total equity and liabilities
    
    
    4,818
 (a)
    
    The opening balance of assets under construction (included in Property, Plant and Equipment)
increased by US$5.8 million. The interest capitalized for 2005 amounted to US$3.4 million.(b)
    
    Deferred tax liability increased by US$1.7 million.
 39
    
    Subsequent events
 Village Main Reef
  F-60




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##### Table of Contents



PNG Partnership agreement
   Sale of Mount Magnet
   Sale of Randfonteins Cooke assets
    40
    
    Segment report
          F-61




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##### Table of Contents



Cash
    
    
    Cashoperating
    
    
    operating
    
    
    Mining
    
    
    CapitalRevenue
    
    
    cost
    
    
    profit
    
    
    assets
    
    
    expenditure
    
    
    
    Ounces*
    
    
    Tons milled*Figures in million (US Dollar)
    
    
    
    
    
    
    
    t000Continuing operationsSouth AfricaUndergroundTshepong
    
    
    223
    
    
    
    125
    
    
    
    98
    
    
    
    404
    
    
    
    27
    
    
    
    
    273,119
    
    
    
    1,649Phakisa
    
    
    4
    
    
    
    2
    
    
    
    2
    
    
    
    312
    
    
    
    40
    
    
    
    
    4,212
    
    
    
    34Bambanani
    
    
    128
    
    
    
    102
    
    
    
    26
    
    
    
    98
    
    
    
    15
    
    
    
    
    158,985
    
    
    
    912Doornkop
    
    
    35
    
    
    
    31
    
    
    
    4
    
    
    
    273
    
    
    
    48
    
    
    
    
    44,143
    
    
    
    494Elandsrand
    
    
    133
    
    
    
    103
    
    
    
    30
    
    
    
    304
    
    
    
    44
    
    
    
    
    158,631
    
    
    
    981Target
    
    
    69
    
    
    
    51
    
    
    
    18
    
    
    
    275
    
    
    
    35
    
    
    
    
    85,006
    
    
    
    686Masimong
    
    
    96
    
    
    
    88
    
    
    
    8
    
    
    
    94
    
    
    
    16
    
    
    
    
    117,575
    
    
    
    892Evander operations
    
    
    193
    
    
    
    127
    
    
    
    66
    
    
    
    131
    
    
    
    33
    
    
    
    
    240,037
    
    
    
    1,447Virginia operations
    
    
    204
    
    
    
    180
    
    
    
    24
    
    
    
    107
    
    
    
    20
    
    
    
    
    250,324
    
    
    
    2,349Other operations
    
    
    58
    
    
    
    52
    
    
    
    6
    
    
    
    29
    
    
    
    6
    
    
    
    
    69,574
    
    
    
    535SurfaceOther operations
    
    
    126
    
    
    
    57
    
    
    
    69
    
    
    
    19
    
    
    
    19
    
    
    
    
    148,921
    
    
    
    9,524Total South Africa
    
    
    1,269
    
    
    
    918
    
    
    
    351
    
    
    
    2,046
    
    
    
    303
    
    
    
    
    1,550,527
    
    
    
    19,503InternationalPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580
    
    
    
    197
    
    
    
    
    
    
    
    
    Total international
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    580
    
    
    
    197
    
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,269
    
    
    
    918
    
    
    
    351
    
    
    
    2,626
    
    
    
    500
    
    
    
    
    1,550,527
    
    
    
    19,503Discontinued operationsCooke operations
    
    
    194
    
    
    
    123
    
    
    
    71
    
    
    
    86
    
    
    
    22
    
    
    
    
    236,242
    
    
    
    3,906Other operations
    
    
    115
    
    
    
    107
    
    
    
    8
    
    
    
    66
    
    
    
    20
    
    
    
    
    162,007
    
    
    
    2,014Total discontinued operations
    
    
    309
    
    
    
    230
    
    
    
    79
    
    
    
    152
    
    
    
    42
    
    
    
    
    398,249
    
    
    
    5,920Total operations
    
    
    1,578
    
    
    
    1,148
    
    
    
    430
    
    
    
    2,778
    
    
    
    542
    
    
    
    
    1,948,776
    
    
    
    25,423
  (309
    )
    
    
    (230
    )
    
    
    

    
    
    1,9321,269
    
    
    
    918
    
    
    
    
    
    
    4,710


*
    
    Production statistics are unaudited F-62




---



##### Table of Contents



Cash
    
    
    Cashoperating
    
    
    operating
    
    
    Mining
    
    
    CapitalRevenue
    
    
    cost
    
    
    profit
    
    
    assets
    
    
    expenditure
    
    
    
    Ounces*
    
    
    Tons milled*Figures in million (US Dollar)
    
    
    
    
    
    
    
    t000Continuing operationsSouth AfricaUndergroundTshepong
    
    
    203
    
    
    
    112
    
    
    
    91
    
    
    
    442
    
    
    
    26
    
    
    
    
    318,887
    
    
    
    1,824Phakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303
    
    
    
    32
    
    
    
    
    
    
    
    
    Bambanani
    
    
    126
    
    
    
    115
    
    
    
    11
    
    
    
    105
    
    
    
    17
    
    
    
    
    197,060
    
    
    
    1,283Doornkop
    
    
    37
    
    
    
    25
    
    
    
    12
    
    
    
    247
    
    
    
    38
    
    
    
    
    57,364
    
    
    
    597Elandsrand
    
    
    124
    
    
    
    103
    
    
    
    21
    
    
    
    299
    
    
    
    33
    
    
    
    
    194,710
    
    
    
    1,117Target
    
    
    91
    
    
    
    53
    
    
    
    38
    
    
    
    287
    
    
    
    16
    
    
    
    
    142,433
    
    
    
    904Masimong
    
    
    95
    
    
    
    82
    
    
    
    13
    
    
    
    79
    
    
    
    15
    
    
    
    
    147,958
    
    
    
    1,074Evander operations
    
    
    151
    
    
    
    113
    
    
    
    38
    
    
    
    143
    
    
    
    28
    
    
    
    
    235,443
    
    
    
    1,667Virginia operations
    
    
    172
    
    
    
    147
    
    
    
    25
    
    
    
    67
    
    
    
    19
    
    
    
    
    266,948
    
    
    
    2,507Other operations
    
    
    65
    
    
    
    51
    
    
    
    14
    
    
    
    28
    
    
    
    6
    
    
    
    
    104,507
    
    
    
    770SurfaceOther operations
    
    
    52
    
    
    
    35
    
    
    
    17
    
    
    
    66
    
    
    
    17
    
    
    
    
    81,761
    
    
    
    4,557Total South Africa
    
    
    1,116
    
    
    
    836
    
    
    
    280
    
    
    
    2,066
    
    
    
    247
    
    
    
    
    1,747,071
    
    
    
    16,300InternationalPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    320
    
    
    
    73
    
    
    
    
    
    
    
    
    Total international
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    320
    
    
    
    73
    
    
    
    
    
    
    
    
    Total continuing operations
    
    
    1,116
    
    
    
    836
    
    
    
    280
    
    
    
    2,386
    
    
    
    320
    
    
    
    
    1,747,071
    
    
    
    16,300Discontinued operationsCooke operations
    
    
    154
    
    
    
    118
    
    
    
    36
    
    
    
    72
    
    
    
    19
    
    
    
    
    243,219
    
    
    
    2,327Other operations
    
    
    219
    
    
    
    180
    
    
    
    39
    
    
    
    125
    
    
    
    42
    
    
    
    
    343,908
    
    
    
    4,213Total discontinued operations
    
    
    373
    
    
    
    298
    
    
    
    75
    
    
    
    197
    
    
    
    61
    
    
    
    
    587,127
    
    
    
    6,540Total operations
    
    
    1,489
    
    
    
    1,134
    
    
    
    355
    
    
    
    2,583
    
    
    
    381
    
    
    
    
    2,334,198
    
    
    
    22,840
  (  373
    )
    
    
    (298
    )
    
    
    

    
    
    2,5771,116
    
    
    
    836
    
    
    
    
    
    
    5,160


*
    
    Production statistics are unaudited F-63




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##### Table of Contents



Cash
    
    
    CashOperating
    
    
    Operating
    
    
    Mining
    
    
    CapitalRevenue
    
    
    cost
    
    
    profit
    
    
    assets
    
    
    expenditure
    
    
    
    Ounces*
    
    
    Tons milled*Figures in million (US Dollar)
    
    
    
    
    
    
    
    t000Continuing operationsSouth AfricaUndergroundTshepong
    
    
    180
    
    
    
    111
    
    
    
    69
    
    
    
    430
    
    
    
    21
    
    
    
    
    335,289
    
    
    
    1,786Phakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    23
    
    
    
    
    
    
    
    
    Bambanani
    
    
    106
    
    
    
    101
    
    
    
    5
    
    
    
    107
    
    
    
    14
    
    
    
    
    200,739
    
    
    
    1,402Doornkop
    
    
    23
    
    
    
    24
    
    
    
    (1
    )
    
    
    203
    
    
    
    26
    
    
    
    
    43,593
    
    
    
    515Elandsrand
    
    
    90
    
    
    
    89
    
    
    
    1
    
    
    
    264
    
    
    
    31
    
    
    
    
    170,867
    
    
    
    987Target
    
    
    81
    
    
    
    52
    
    
    
    29
    
    
    
    280
    
    
    
    10
    
    
    
    
    150,196
    
    
    
    813Masimong
    
    
    73
    
    
    
    67
    
    
    
    6
    
    
    
    65
    
    
    
    14
    
    
    
    
    136,153
    
    
    
    1,020Evander operations
    
    
    142
    
    
    
    111
    
    
    
    31
    
    
    
    120
    
    
    
    26
    
    
    
    
    274,439
    
    
    
    1,700Virginia operations
    
    
    146
    
    
    
    135
    
    
    
    11
    
    
    
    51
    
    
    
    14
    
    
    
    
    276,285
    
    
    
    2,368Other operations
    
    
    42
    
    
    
    42
    
    
    
    
    
    
    
    16
    
    
    
    4
    
    
    
    
    77,652
    
    
    
    599SurfaceOther operations
    
    
    54
    
    
    
    46
    
    
    
    8
    
    
    
    48
    
    
    
    7
    
    
    
    
    104,738
    
    
    
    3,445Total South Africa
    
    
    937
    
    
    
    778
    
    
    
    159
    
    
    
    1,848
    
    
    
    190
    
    
    
    
    1,769,951
    
    
    
    14,635InternationalPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213
    
    
    
    15
    
    
    
    
    
    
    
    
    Total international
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213
    
    
    
    15
    
    
    
    
    
    
    
    
    Total continuing operation
    
    
    937
    
    
    
    778
    
    
    
    159
    
    
    
    2,061
    
    
    
    205
    
    
    
    
    1,769,951
    
    
    
    14,635Discontinued operationsCooke operations
    
    
    137
    
    
    
    102
    
    
    
    35
    
    
    
    58
    
    
    
    25
    
    
    
    
    256,739
    
    
    
    2,034Other operations
    
    
    190
    
    
    
    156
    
    
    
    34
    
    
    
    157
    
    
    
    35
    
    
    
    
    360,235
    
    
    
    4,151Total discontinued operations
    
    
    327
    
    
    
    258
    
    
    
    69
    
    
    
    215
    
    
    
    60
    
    
    
    
    616,974
    
    
    
    6,185Total operations
    
    
    1,264
    
    
    
    1,036
    
    
    
    228
    
    
    
    2,276
    
    
    
    265
    
    
    
    
    2,386,925
    
    
    
    20,820Reconciliation of segment
data to consolidated
financial statements (refer
note 41):(  327
    )
    
    
    (258
    )
    
    
    

    
    
    
    2,419937
    
    
    
    778
    
    
    
    
    
    
    
    4,695
 *
    
    Production statistics are unaudited
 F-64




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##### Table of Contents



41
    
    Reconciliation of segment information to consolidated income statements and balance sheet:
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006The reconciliation of segment
data to consolidated financials
line item in the segment reports
are broken down in the following
elements, to give a better
understanding of the differences
between the income statement,
balance sheet and the segment
report.Revenue from:Discontinued operations
    
    
    309
    
    
    
    373
    
    
    
    327Production costs from:Discontinued operations
    
    
    230
    
    
    
    298
    
    
    
    258
 US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Reconciliation of cash operating
profit to consolidated loss
before taxation and discontinued
operations:Total segment revenue
    
    
    1,578
    
    
    
    1,489
    
    
    
    1,264Total segment production costs
    
    
    (1,148
    )
    
    
    (1,134
    )
    
    
    (1,036
    )Cash operating profit
    
    
    430
    
    
    
    355
    
    
    
    228Less discontinued operations
    
    
    (79
    )
    
    
    (75
    )
    
    
    (69
    )351
    
    
    
    280
    
    
    
    159Cost of sales items other than
production costs
    
    
    (204
    )
    
    
    (93
    )
    
    
    (131
    )Amortization and depreciation of
mining properties, mine
development cost and mine plant
facilities
    
    
    (106
    )
    
    
    (102
    )
    
    
    (129
    )Amortization and depreciation of
other than mining properties,
mine development cost and mine
plant facilities
    
    
    (11
    )
    
    
    (4
    )
    
    
    (9
    )Provision/(reversal of provision)
for rehabilitation cost
    
    
    (1
    )
    
    
    6
    
    
    
    3Care and maintenance cost of
restructured shafts
    
    
    (10
    )
    
    
    (8
    )
    
    
    (22
    )Employment termination and
restructuring costs
    
    
    (29
    )
    
    
    
    
    
    
    12Share-based payments
    
    
    (6
    )
    
    
    (6
    )
    
    
    (15
    )Impairment/(reversal of
impairment) of assets
    
    
    (40
    )
    
    
    19
    
    
    
    30Provision for post retirement
benefits
    
    
    (1
    )
    
    
    2
    
    
    
    (1
    )147
    
    
    
    187
    
    
    
    28Corporate, administration and
other expenditure
    
    
    (31
    )
    
    
    (31
    )
    
    
    (24
    )Exploration expenditure
    
    
    (28
    )
    
    
    (27
    )
    
    
    (11
    )Other expenses/income
    
    
    (15
    )
    
    
    25
    
    
    
    (97
    )Operating profit
    
    
    73
    
    
    
    154
    
    
    
    (104
    )Loss from associate
    
    
    (11
    )
    
    
    (3
    )
    
    
    (17
    )Profit on sale of investment in
associate
    
    
    
    
    
    
    33
    
    
    
    Impairment of investment in
associate
    
    
    (12
    )
    
    
    
    
    
    
    Profit on sale of investment in
subsidiary
    
    
    
    
    
    
    
    
    
    
    2Fair value of non-derivative
financial instruments
    
    
    5
    
    
    
    15
    
    
    
    14Loss on sale of listed investments
    
    
    (63
    )
    
    
    (5
    )
    
    
    45Investment income
    
    
    39
    
    
    
    27
    
    
    
    31Finance cost
    
    
    (70
    )
    
    
    (65
    )
    
    
    (62
    )(Loss)/profit before taxation and
discontinued operations
    
    
    (39
    )
    
    
    156
    
    
    
    (91
    )
 F-65




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##### Table of Contents



US DollarFigures in million
    
    2008
    
    
    2007
    
    
    2006Reconciliation of total segment
assets to consolidated assets
includes the following:Non-current assetsProperty, plant and equipment not
allocated to a segment
    
    
    906
    
    
    
    1,026
    
    
    
    987Intangible assets
    
    
    283
    
    
    
    328
    
    
    
    316Restricted cash
    
    
    10
    
    
    
    1
    
    
    
    36Restricted investments
    
    
    188
    
    
    
    195
    
    
    
    184Investment in financial assets
    
    
    9
    
    
    
    8
    
    
    
    137Investments in associates
    
    
    19
    
    
    
    1
    
    
    
    266Deferred tax asset
    
    
    190
    
    
    
    216
    
    
    
    194Trade and other receivables
    
    
    18
    
    
    
    8
    
    
    
    8Current assetsInventories
    
    
    89
    
    
    
    105
    
    
    
    93Investment in financial assets
    
    
    
    
    
    
    353
    
    
    
    Trade and other receivables
    
    
    112
    
    
    
    130
    
    
    
    103Income and mining taxes
    
    
    11
    
    
    
    9
    
    
    
    4Restricted cash
    
    
    
    
    
    
    39
    
    
    
    Cash and cash equivalents
    
    
    53
    
    
    
    101
    
    
    
    91Non-current assets classified as
held-for-sale excluding mining
assets
    
    
    44
    
    
    
    57
    
    
    
    1,932
    
    
    
    2,577
    
    
    
    2,419
 F-66