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EX-99 128 ex99_1.htm Page 1

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Harmony Gold Mining Company Limited

Report of the Independent Registered Public Accounting Firm

F-2

Group Income Statements for the years ended June 30, 2015, 2014 and 2013

F-3

Group Statements of Comprehensive Income for the years ended June 30, 2015, 2014 and 2013

F-4

Group Balance Sheets at June 30, 2015 and 2014

F-5

Group Statements of Changes in Shareholders’ Equity for the years ended June 30, 2015, 2014 and 2013

F-6

Group Cash Flow Statements for the years ended June 30, 2015, 2014 and 2013

F-7

Notes to the Group Financial Statements

F-8

Index to Financial Statements

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Harmony Gold Mining Company Limited

/s/ PricewaterhouseCoopers Inc.
Johannesburg, Republic of South Africa
23 October 2015

In our opinion, the accompanying consolidated balance sheets and the related consolidated income statements, statements of
comprehensive income, statements of changes in shareholders’ equity and cash flow statements present fairly, in all material
respects, the financial position of Harmony Gold Mining Company Limited and its subsidiaries at June 30, 2015 and 2014, and the
results of their operations and their cash flows for each of the three years in the period ended June 30, 2015 in conformity with
International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2015, based on
criteria established in Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15 (b). Our
responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting
based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement and whether effective internal control over financial
reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-2

GROUP INCOME STATEMENTS

for the years ended 30 June 2015

Figures in million

Notes

2015

2014

2013

CONTINUING OPERATIONS

Revenue

1 348

1 515

1 803

Cost of sales

(1 645)

(1 549)

(1 829)

Production costs

(1 103)

(1 148)

(1 283)

Amortisation and depreciation

(216)

(207)

(227)

Impairment of assets

(285)

(135)

(274)

Employment termination and restructuring costs

(22)

(26)

(5)

Other items

(19)

(33)

(40)

Gross loss

(297)

(34)

(26)

Corporate, administration and other expenditure

(33)

(42)

(53)

Social investment expenditure

(6)

(9)

(14)

Exploration expenditure

(23)

(44)

(76)

Profit on sale of property, plant and equipment

Loss on scrapping of property, plant and equipment

(42)

Other expenses (net)

(33)

(20)

(40)

Operating loss

(433)

(146)

(193)

Loss from associates

(2)

(10)

Profit on disposal/(impairment) of investments

(10)

Net gain on financial instruments

Investment income

Finance cost

(22)

(27)

(29)

Loss before taxation

(436)

(145)

(191)

Taxation

(69)

Net loss from continuing operations

(374)

(118)

(260)

DISCONTINUED OPERATIONS

Profit from discontinued operations

Net loss for the year

(374)

(118)

(224)

Attributable to:
Owners of the parent

(374)

(118)

(224)

Non-controlling interest

Loss per ordinary share (cents)

Loss from continuing operations

(86)

(27)

(60)

Earnings from discontinued operations

Total loss

(86)

(27)

(52)

Diluted loss per ordinary share (cents)

Loss from continuing operations

(86)

(27)

(60)

Earnings from discontinued operations

Total diluted loss

(86)

(27)

(52)

The accompanying notes are an integral part of these consolidated financial statements.

US dollar

F-3

GROUP STATEMENTS OF COMPREHENSIVE INCOME

for the years ended 30 June 2015

Figures in million

Notes

2015

2014

2013

Net loss for the year

(374)

(118)

(224)

Other comprehensive loss for the year, net of income tax

(367)

(209)

(666)

Items that may be reclassified subsequently to profit or loss

(368)

(206)

(666)

Foreign exchange translation loss

(368)

(206)

(665)

Gain/(loss) on fair value movement of available-for-sale investments

(9)

Movement on available-for-sale investments recognised in profit or loss

(1)

Reversal of fair value movement on acquisition of associate

(2)

Items that will not be reclassified to profit or loss

(3)

Remeasurement of retirement benefit obligation

Actuarial gain/(loss) recognised during the year

(4)

Deferred taxation thereon

Total comprehensive loss for the year

(741)

(327)

(890)

Attributable to:
Owners of the parent

(741)

(327)

(890)

Non-controlling interest

The accompanying notes are an integral part of these consolidated financial statements.

US dollar

F-4

GROUP BALANCE SHEETS

Figures in million

Notes

ASSETS

Non-current assets

Property, plant and equipment

2 430

3 116

Intangible assets

Restricted cash

Restricted investments

196

217

Deferred tax assets

Investments in financial assets

Inventories

Trade and other receivables

Total non-current assets

2 713

3 434

Current assets

Inventories

106

145

Trade and other receivables

Income and mining taxes

Restricted cash

Cash and cash equivalents

172

Total current assets

259

418

Total assets

2 972

3 852

EQUITY AND LIABILITIES

Share capital and reserves

Share capital

4 035

4 035

Other reserves

(1 238)

(887)

Accumulated loss

(597)

(223)

Total equity

2 200

2 925

Non-current liabilities

Deferred tax liabilities

157

253

Provision for environmental rehabilitation

182

198

Retirement benefit obligation

Other non-current liabilities

Borrowings

280

270

Total non-current liabilities

635

753

Current liabilities

Income and mining taxes

Trade and other payables

137

174

Total current liabilities

137

174

Total equity and liabilities

2 972

3 852

The accompanying notes are an integral part of these consolidated financial statements.

US dollar

At 30 June

2015

At 30 June

2014

F-5

GROUP STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

for the years ended 30 June 2015

Number of

ordinary

Other

Figures in million (US dollar)

shares issued

capital

Share
premium

reserves

Total

Notes

Balance - 30 June 2012

431 564 236

4 003

168

(65)

4 139

Issue of shares
- Exercise of employee share options

225 654

3 500 000

-
-

-
30
-
(666)

Share-based payments

(1)

-
(224)

Net loss for the year

(224)

Other comprehensive loss for the year

(666)

2
(51)

Dividends paid¹

(51)

Balance - 30 June 2013

435 289 890

4 002

(105)

(701)

3 229

Issue of shares
- Exercise of employee share options

535 557

-
23

Share-based payments

-
(118)

23
(118)
(209)

Net loss for the year

Other comprehensive loss for the year

(209)

Balance - 30 June 2014

435 825 447

4 002

(223)

(887)

2 925

Issue of shares
- Exercise of employee share options

361 686

-
16

Share-based payments

-
(374)

16
(374)

Net loss for the year

-

-

-

-

Other comprehensive loss for the year

-

-

-

-

(367)

(367)

Balance - 30 June 2015

436 187 133

33

4 002

(597)

(1 238)

2 200

¹ Dividends per share is disclosed under the earnings per share note. Refer to note 13.

The accompanying notes are an integral part of these consolidated financial statements.

Accumulated

loss

- Shares issued to the Tlhakanelo Employee
Share Trust

Share of retained earnings on acquisition of
associate

F-6

GROUP CASH FLOW STATEMENTS

for the years ended 30 June 2015

Figures in million

Notes

2015

2014

2013

CASH FLOW FROM OPERATING ACTIVITIES

Cash generated by operations

168

218

394

Interest received

Interest paid

(9)

(12)

(14)

Income and mining taxes refunded/(paid)

(33)

Cash generated by operating activities

176

219

363

CASH FLOW FROM INVESTING ACTIVITIES

(Increase)/decrease in restricted cash

(1)

(Increase)/decrease in amounts invested in environmental trusts

(2)

Proceeds on disposal of Evander, net of cash disposed

139

Increase in amounts invested in social trust fund

(1)

Purchase of investment in associate

(9)

Proceeds on disposal of investments

Loan to associate

(10)

Proceeds on disposal of property, plant and equipment

Additions to intangible assets

(1)

(1)

Additions to property, plant and equipment

(246)

(256)

(464)

Cash utilised by investing activities

(253)

(255)

(320)

CASH FLOW FROM FINANCING ACTIVITIES

Borrowings raised

Borrowings paid

(65)

(44)

(35)

Dividends paid

(50)

Cash generated by financing activities

(5)

Foreign currency translation adjustments

(22)

(17)

(45)

Net decrease in cash and cash equivalents

(84)

(37)

(7)

Cash and cash equivalents - beginning of year

172

209

216

Cash and cash equivalents - end of year

172

209

The accompanying notes are an integral part of these consolidated financial statements.

US dollar

F-7

NOTES TO THE GROUP FINANCIAL STATEMENTS

for the years ended 30 June 2015

GENERAL INFORMATION

ACCOUNTING POLICIES

Title

Effective date

Title

The following standards or amendments to standards are not relevant to the group:

Pronouncement

Title

Regulatory Deferral Accounts

Pronouncement

Title

The company is a public company, incorporated and domiciled in South Africa. The address of its registered office is Randfontein Office Park, Corner Main
Reef Road and Ward Avenue, Randfontein, 1759.

The consolidated financial statements were authorised for issue by the board of directors on 23 October 2015.

Harmony Gold Mining Company Limited (the company) and its subsidiaries (collectively Harmony or the group) are engaged in gold mining and related
activities, including exploration, extraction and processing. Gold bullion, the group’s principal product, is currently produced at its operations in South Africa
and Papua New Guinea (PNG).

BASIS OF PREPARATION

IAS 39 (Amendments)

IFRIC 21

1 January 2014

IFRSs

IAS 19 (Amendments)

1 July 2014

Pronouncement

IFRS 10, IFRS 12 and IAS 27
(Amendments)

RECENT ACCOUNTING DEVELOPMENTS

New standards, amendments to standards and interpretations to existing standards adopted by the group

The effective dates below are for financial periods beginning on or after the given date.

1 January 2014

The following standards or amendments to standards are not expected to have an impact on the results of the group but will affect the disclosure in the
financial statements:

Effective date

1 January 2016

Amendments to Property, Plant and Equipment and Intangible Assets – Clarification of
acceptable methods of depreciation and amortisation

IAS 16 and IAS 38 (Amendments)

IFRS 14

IAS 16 and IAS 41 (Amendments)

New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not
been early adopted

At the date of authorisation of these financial statements, the standards, amendments to standards and interpretations listed below were in issue but not yet
effective. These new standards and interpretations have not been early adopted by the group and the group plans on adopting these standards,
amendments to standards and interpretations on the dates when they become effective.

Effective date

1 January 2014

Annual improvements 2010-2012 cycle

Financial Instruments: Presentation - Asset and liability offsetting

Impairment of Assets - Recoverable amount disclosures for non-financial assets

The principal accounting policies applied in the preparation of the consolidated financial statements have been consistently applied in all years presented,
except as stated under the heading ‘Recent accounting developments’.

The financial statements of the group have been prepared in accordance with, and are in compliance with, International Financial Reporting Standards as
issued by the International Accounting Standards Board (IASB) and IFRIC Interpretations (collectively IFRS).

The following standards or amendments to standards have become effective but had no impact on the results of the group:

1 January 2014

1 July 2014

Amendments to Consolidated Financial Statements, Disclosures of Interests in Other
Entities and Separate Financial Statements - Investment entities

Annual improvements 2011-2013 cycle

Employee Benefits - Defined Benefit Plans: Employee Contributions

Financial Instruments: Recognition and measurement - Novation of derivatives and
continuation of hedge accounting

Levies

1 January 2014

IAS 32 (Amendments)

IAS 36 (Amendments)

The following standards or amendments to standards have become effective and had an impact on the disclosure:

Pronouncement

IFRSs

Effective date

1 July 2014

1 January 2016

Amendments to Property, Plant and Equipment and Agriculture – Bearer plants

F-8

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

ACCOUNTING POLICIES continued

Pronouncement

Title

IFRS 11 (Amendments)

RECENT ACCOUNTING DEVELOPMENTS continued

Amendments to Consolidated Financial Statements and Investments in Associates and
Joint Ventures
These amendments address an inconsistency between the requirements in IFRS 10 and
those in IAS 28 in dealing with the sale or contribution of assets between an investor and
its associate or joint venture. The main consequence of the amendments is that a full gain
or loss is recognised when a transaction involves a business (whether it is housed in a
subsidiary or not). A partial gain or loss is recognised when a transaction involves assets
that do not constitute a business, even if these assets are housed in a subsidiary.

The impact of the amendment is currently being assessed by management.

1 January 2016

Joint arrangements - Acquisitions of interests in joint operations
Amends IFRS 11 Joint Arrangements to require an acquirer of an interest in a joint
operation in which the activity constitutes a business (as defined in IFRS 3 Business
Combinations ) to:
Apply all of the business combinations accounting principles in IFRS 3 and other IFRSs,
except for those principles that conflict with guidance in IFRS 11.
Disclose the information required by IFRS 3 and either IFRSs for business combinations.

The amendments apply both to the initial acquisition of an interest in joint operation, and
the acquisition of an additional interest in a joint operation (in the latter case, previously
held interests are not remeasured).

The impact of the standard is currently being assessed by management.

1 January 2016

Hedge accounting
The new requirements in IFRS 9 align hedge accounting more closely with risk
management, and so should result in more ‘decision-useful’ information to users of
financial statements. The revised standard also establishes a more principles-based
approach to hedge accounting and addresses inconsistencies and weaknesses in the
current model in IAS 39.

Expected credit losses
IFRS 9 introduces a new model for the recognition of impairment losses – the expected
credit losses (ECL) model. The ECL model constitutes a change from the guidance in IAS
39 and seeks to address the criticisms of the incurred loss model which arose during the
economic crisis. In practice, the new rules mean that entities will have to record a day 1
loss equal to the 12-month ECL on initial recognition of financial assets that are not credit
impaired (or lifetime ECL for trade receivables).

IFRS 9 contains a ‘three stage’ approach which is based on the change in credit quality of
financial assets since initial recognition. Assets move through the three stages as credit
quality changes and the stages dictate how an entity measures impairment losses and
applies the effective interest rate method. Where there has been a significant increase in
credit risk, impairment is measured using lifetime ECL rather than 12-month ECL. The
model includes operational simplifications for lease and trade receivables.

Disclosures
Extensive disclosures are required, including reconciliations from opening to closing
amounts of the ECL provision, assumptions and inputs and a reconciliation on transition of
the original classification categories under IAS 39 to the new classification categories in
IFRS 9.

The impact of the standard is currently being assessed by management.

IFRS 10, IFRS 12 and IAS 28
(Amendments)

The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the group:

Effective date

IFRS 9

Financial Instruments
This standard on classification and measurement of financial assets and financial liabilities
will replace IAS 39, Financial Instruments: Recognition and Measurement . IFRS 9 has two
measurement categories: amortised cost and fair value. All equity instruments are
measured at fair value.

A debt instrument is measured at amortised cost only if the entity is holding it to collect
contractual cash flows and the cash flows represent principal and interest. For liabilities,
the standard retains most of the IAS 39 requirements. These include amortised-cost
accounting for most financial liabilities, with bifurcation of embedded derivatives. The main
change is that, in cases where the fair value option is taken for financial liabilities, the part
of a fair value change due to an entity’s own credit risk is recorded in other comprehensive
income rather than the income statement, unless this creates an accounting mismatch.

1 January 2018

F-9

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

ACCOUNTING POLICIES continued

Pronouncement

Title

IFRS 15

IFRSs

The impact of the improvements are currently being assessed by management.

MEASUREMENT BASIS

GROUP ACCOUNTING POLICIES

2.1

Consolidation

Control

(i) Subsidiaries

The following standards, amendments to standards and interpretations to existing standards may possibly have an impact on the group: continued

RECENT ACCOUNTING DEVELOPMENTS continued

IAS 27 (Amendments)

1 January 2016

Separate Financial Statements
Amends IAS 27 to restore the option to use the equity method to account for investments in
subsidiaries, joint ventures and associates in an entity’s separate financial statements.

The impact of the amendment is currently being assessed by management.

IAS 1

Revenue from contracts with customers
The core principle is that revenue must be recognised when goods or services are
transferred to the customer, at the transaction price. The most significant changes that
flow from the principle are:
1. Any bundled goods or services that are distinct must be separately recognised, and any
discounts or rebates on the contract price must generally be allocated to the separate
elements.
2. Revenue may be recognised earlier than under current standards if the consideration
varies for any reasons (such as for incentives, rebates, performance fees, royalties,
success of an outcome etc.) - minimum amounts must be recognised if they are not at
significant risk of reversal.
3. The point at which revenue is able to be recognised may shift: some revenue which is
currently recognised at a point in time at the end of a contract may now be recognised
over the contract term and vice versa.

The impact of the standard is currently being assessed by management.

1 January 2018

Effective date

Annual Improvements 2012-2014 cycle
IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations – Addresses
changes in methods of disposal.
IFRS 7 – Financial Instruments : Disclosures – Addresses servicing contracts and the
applicability of the amendments to IFRS 7 to condensed interim financial statements.
IFRS 19 – Employee Benefits – Addresses issues related to regional markets when
determining discount rates.
IFRS 34 – Interim Financial Reporting – Addresses disclosure of information ‘elsewhere in
the interim financial report’.

1 January 2016

Presentation of Financial Statements
In December 2014 the IASB issued amendments to clarify guidance in IAS 1 on materiality
and aggregation, the presentation of subtotals, the structure of financial statements and
the disclosure of accounting policies.

The impact of the amendment is currently being assessed by management.

The group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity.

Subsidiaries are entities over which the group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the
group up until when that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also
eliminated. Accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the group.

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets,
financial assets and financial liabilities at fair value through profit or loss and cash-settled share-based payments.

Accounting policies are included in the relevant notes to the consolidated financial statements and have been highlighted in grey shading in the notes to the
group financial statements. The accounting policies below are applied throughout the financial statements:

The group recognises that control is the single basis for consolidation for all types of entities in accordance with IFRS 10 - Consolidated Financial
Statements.

The consolidated financial information includes the financial statements of the company, its subsidiaries, interest in associates and joint arrangements
and structured entities. Where the group has no control over an entity, that entity is not consolidated.

The group, regardless of the nature of its involvement with an entity, shall determine whether it is a parent by assessing whether it controls the
investee.

F-10

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

ACCOUNTING POLICIES continued

2.1 Consolidation continued

(i) Subsidiaries continued

(ii) Associates

(iii) Joint arrangements

(iv) Structured entities

The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of
any previous equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. If
this is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in
the income statement.

Associates are entities in which the group has significant influence, but not control, over operational and financial policies. This may be when there is
a shareholding of between 20% and 50% of the voting rights or when significant influence can be otherwise demonstrated, for example where the
group has the right of representation on the board of directors of the entity.

The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a
subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the group. The consideration transferred
includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at fair
value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

GROUP ACCOUNTING POLICIES continued

Unrealised gains on transactions between the group and its associates are eliminated to the extent of the group’s interest in the associates.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment that should be recognised.

Accounting policies of associates have been reviewed to ensure consistency with the policies adopted by the group.

Joint arrangements are arrangements of which two or more parties have joint control and are contractually bound. The joint arrangement can either be
a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement and have the
right to the assets, and obligations for the liabilities, relating to the arrangement. These parties are called joint operators. A joint venture is a joint
arrangement where the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called
joint venturers.

For interest in joint operations, the group includes its share of the joint operations' 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 recognises the portion of gains or losses on the sale of assets by the group to the joint operation that is attributable to the other joint
operators. The group does not recognise its share of profits or losses from the joint operation that result from the purchase of assets by the group
from the joint operation until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the
net realisable value of current assets or an impairment loss, the loss is recognised immediately.

Investments in associates are accounted for by using the equity method of accounting, and are initially recognised at cost. The group’s investment in
associates includes goodwill identified on acquisition. Cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. The group’s share of the associates’ post-acquisition profits or losses is recognised in the income statement, and its share of post-
acquisition movement in reserves is recognised in other reserves.

When the group’s share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise further losses, unless it
has incurred obligations or made payments on behalf of the associate.

If an associate is acquired in stages, the cost of the associate is measured as the sum of the consideration paid for each purchase plus a share of
investee’s profits and other equity movements. Any acquisition-related costs are treated as part of the investment in associate. Any related goodwill is
calculated at each stage of the acquisition based on the consideration paid and the share of fair value of net assets acquired at the date of each
acquisition.

Where the previously held interest was classified as an available-for-sale financial instrument, any existing gains or losses recognised in the available-
for-sale revaluation reserve are reversed through other comprehensive income. The cost basis of the investment is then further adjusted by including
the group’s share of profits after dividends, other comprehensive income and other equity movements relating to the previously held interest is
accounted for in equity.

The carrying value of an associate is reviewed on a regular basis and, if impairment in the carrying value has occurred, it is written off in the period in
which such impairment is identified.

The group recognises its interest in a joint venture as an investment and accounts for it using the equity accounting method.

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity,
such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements.

The accounting treatment for a structured entity will fall into one of the aforementioned categories (i to iii) depending on whether the group has control
over that structured entity.

F-11

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

ACCOUNTING POLICIES continued

2.2 Foreign currency translation

(i) Functional and presentation currency

(ii) Transactions and balances

(iii) Group companies

2.3 Revenue recognition

2.4 Exploration expenditure

•

All resulting exchange differences are recognised as a separate component of other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency
instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is sold or control is
otherwise lost, exchange differences that were recorded in other comprehensive income are recognised in profit or loss in the period of the disposal
or change in control.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign entity and
translated at the closing rate.

The group has determined that gold is its primary product and other metals produced as part of the extraction process are considered to be by-
products of gold. Revenue arising from metal sales is only recognised when the significant risks and rewards of ownership have been transferred,
neither continuing managerial involvement nor effective control over the metals sold has been retained, the amount of revenue and costs incurred can
be measured reliably and it is probable that the economic benefits associated with the sale will flow to the group. These conditions are satisfied when
the gold has been delivered in terms of the contract and the sales price fixed, as evidenced by the certificate of sale issued by the refinery. The sales
price for the majority of the group’s gold is based on the gold spot price according to the afternoon London Bullion Market fixing price for gold on the
date the sale is concluded.

For translation of the rand financial statement items to US dollar, the average of R11.45 (2014: R10.35) (2013: R8.82) per US$1 was used for income
statement items (unless this average was not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in
which case these items were translated at the rate on the date of the transactions) and the closing rate of R12.16 (2014: R10.61) per US$1 for asset
and liability items. Equity items were translated at historic rates. The profit from discontinued operations for the 2013 financial year was translated at
the average rate for the eight months (being the period that Evander was part of the group during 2013) of R8.55 per US$1.

The translation effect from rand to US dollar is included in other comprehensive income in the US$ financial statements.

References to “A$” refers to Australian currency, “R” to South African currency, “$” or “US$” to United States currency and “K” or “kina” to Papua New
Guinean currency.

Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation to year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Gains and losses recognised in the
income statement are included in the determination of “other expenses (net)”.

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).

GROUP ACCOUNTING POLICIES continued

Revenue further excludes value-added tax. Revenues from silver and other by-product sales are credited to production costs as a by-product credit.

The group has elected to expense all exploration and evaluation expenditures until it is concluded that the project is technically feasible and
commercially viable, and that future economic benefits are therefore probable. The information used to make that determination depends on the level
of exploration as well as the degree of confidence in the ore body as set out below.

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 the technical and commercial viability of the project has been demonstrated usually through the
completion of a final feasibility study. However, in certain instances, the technical and commercial viability of the deposit may be demonstrated at an
earlier stage, for example where an extended feasibility study is conducted and the underlying feasibility study in respect of specific components of
the mineral deposit has advanced to such a stage that significant commercially viable reserves have been established, and the other criteria for the
recognition of an asset have been met.

Exploration and evaluation expenditure on brownfield sites, being those adjacent to mineral deposits which are already being mined or developed, is
expensed as incurred until the group is able to demonstrate that future economic benefits are probable through the completion of a feasibility study,
after which the expenditure is capitalised as mine development cost. A ‘feasibility study’ consists of a comprehensive study of the viability of a mineral
project that has advanced to a stage where the mining method has been established, and which, if an effective method of mineral processing has
been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating economic factors and the
evaluation of other relevant factors. The feasibility study, when combined with existing knowledge of the mineral property that is adjacent to mineral
deposits that are already being mined or developed, allows the group to conclude that the project is technically feasible and commercially viable.

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:

•

Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet while equity items are

translated at historic rates;

•

Income and expenses for each income statement are translated at average exchange rates (the rate on the date of the transaction is used if the

average is not a reasonable rate for the translation of the transaction);

F-12

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

ACCOUNTING POLICIES continued

2.4 Exploration expenditure continued

2.5 Impairment of non-financial assets

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

GROUP ACCOUNTING POLICIES continued

The preparation of the financial statements in conformity with IFRS requires the group’s management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances.

The resulting accounting estimates may differ from actual results. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the group statements are:

• Estimate of taxation – note 11;

In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of cash
flows from other asset groups. With the exception of other mine-related exploration potential and greenfields exploration potential, estimates of future
undiscounted cash flows are included on an area of interest basis, which generally represents an individual operating mine, even if the mines are
included in a larger mine complex.

In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential, cash flows and fair
values are individually evaluated based primarily on recent exploration results and recent transactions involving sales of similar properties, if any.
Assumptions underlying future cash flow estimates are subject to significant risks and uncertainties.

Impairment losses on goodwill are recognised immediately in the income statement and are not reversed. The impairment testing is performed
annually on 30 June or when events or changes in circumstances indicate that it may be impaired.

Non-financial assets other than goodwill that suffered an impairment are reviewed annually for possible reversal of the impairment at 30 June.
Reversal of impairments is also considered when there is objective evidence to indicate that the asset is no longer impaired. Where an impairment
subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but not higher than
the carrying value that would have been determined had no impairment been recognised in prior years.

Exploration and evaluation expenditure relating to extensions of mineral deposits which are already being mined or developed, including expenditure
on the definition of mineralisation of such mineral deposits, is capitalised 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, allows the directors to conclude that the project is technically feasible and
commercially viable.

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or when there is an indication of
impairment.

Assets that are subject to amortisation are reviewed annually on 30 June for impairment or whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.

An impairment loss is recognised in the income statement for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Each operating shaft, along with allocated
common assets such as plants and administrative offices, is considered to be a cash-generating unit as each shaft is largely independent from the
cash flows of other shafts and assets belonging to the group.

Fair value less costs to sell is generally determined by using discounted estimated after-tax 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, capital expenditure and cash costs of production, all based on life-of-mine plans. Future cash flows are discounted to their present value using
a post-tax discount rate that reflects current market assessments of the time value of money and risk specific to the asset. Refer to note 14 for detail.

The term “recoverable minerals” refers to the estimated amount of gold that will be obtained from reserves and resources and all related exploration
stage mineral interests (except for other mine-related exploration potential and greenfields exploration potential discussed separately below) after
taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such related exploration stage mineral
interests will be risk adjusted based on management’s relative confidence in such materials.

Please refer to the specific notes for further information on the key accounting estimates and assumptions applied.

• Valuation of interest in associate – note 20;
• Estimate of exposure and liabilities with regard to rehabilitation costs – note 25;
• Estimate of employee benefit liabilities – note 26;
• Fair value of share-based payments – note 32;
• Assessment of contingencies – note 34.

• Gold mineral reserves and resources – note 14;
• Production start date – note 14;
• Impairment of assets – note 14;
• Depreciation of property plant and equipment – note 14;
• Impairment of goodwill – note 15;

F-13

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

FINANCIAL RISK MANAGEMENT

The group's financial assets and liabilities are set out below:

Figures in million (US dollars)

Loans and

receivables

Available-for-

sale financial

assets

Held-to-

maturity

investments

Fair value

through

profit or loss

Financial

liabilities at

amortised

cost

At 30 June 2015

Restricted cash

Restricted investments

113

Trade and other receivables

Cash and cash equivalents

Borrowings

280

Other non-current liabilities

Trade and other payables

At 30 June 2014

Restricted cash

Restricted investments

103

Trade and other receivables

Cash and cash equivalents

172

Borrowings

270

Other non-current liabilities

Trade and other payables

MARKET RISK

(i) Foreign exchange risk

Figures in million

2015

2014

Sensitivity analysis - borrowings

Rand against US$

Increase by 10%

Decrease by 10%

(25)

(27)

Closing rate

12.16

10.61

Sensitivity analysis - financial assets

Kina against A$

Increase by 10%

Decrease by 10%

Closing rate

2.11

2.28

US$ against Kina

Increase by 10%

Decrease by 10%

(1)

Closing rate

0.37

0.41

The group's financial instruments expose it to a variety of financial risks: market risk (including currency 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 certain selected financial risks in close cooperation with the group's operating units. The board provides written principles for overall risk
management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments
and non-derivative financial instruments, and the investment of excess liquidity.

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar (US$).
Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. Foreign exchange
risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.
Harmony’s revenues are sensitive to the R/US$ exchange rate as all revenues are generated by gold sales denominated in US$. Harmony generally does not
enter into forward sales, derivatives or other hedging arrangements to establish an exchange rate in advance for the sale of its future gold production.

The group is exposed to foreign exchange risk arising from borrowings and cash denominated in a currency other than the functional currency of that entity.
Harmony generally does not enter into forward sales, derivatives or other hedging arrangements to manage this risk.

The 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 that would affect profit or loss. Management considers a range between 10% and 20% to be a reasonable change.

US dollar

F-14

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

FINANCIAL RISK MANAGEMENT continued

MARKET RISK continued

(ii) Other price risk

Sensitivity analysis

Commodity price sensitivity

(iii) Interest rate risk

Sensitivity analysis - borrowings

Figures in million

2015

2014

Increase by 100 basis points

(3)

(3)

Decrease by 100 basis points

Sensitivity analysis - financial assets

Figures in million

2015

2014

Increase by 100 basis points

Decrease by 100 basis points

(3)

(3)

CREDIT RISK

US dollar

The group is exposed to the risk of fluctuations in the fair value of the available-for-sale and fair value through profit or loss 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.

A 1% increase in the share price of the available-for-sale investments at the reporting date, with all other variables held constant, would not have had a material
impact on other comprehensive income for 2014 and 2015.

Certain of the restricted investments are linked to the Shareholder Weighted Top 40 Index (SWIX 40) and the Top 40 index on the JSE. A 1% increase in the
SWIX 40 and Top 40 index at the reporting date, with all other variables held constant, would have increased profit or loss by US$0.3 million (2014: US$0.4
million); an equal change in the opposite direction would have decreased profit or loss by US$0.1 million (2014: US$0.2 million).

The 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 others hedging arrangements to establish a price in advance for the sale of future gold production.

The group's interest rate risk arises mainly from long-term borrowings. The group has variable interest rate borrowings. Variable rate borrowings expose the group
to cash flow interest rate risk. The group has not entered into interest rate swap agreements.

A 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 2014.

US dollar

Interest rate risk arising from long-term borrowings is offset by cash and cash equivalents, restricted cash and restricted investments held at variable rates.

Credit 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. Refer to note 19 for management's assessment. The credit risk arising from
restricted cash, cash and cash equivalents and restricted investments is managed by ensuring amounts are only invested with financial institutions of good credit
quality. The group has policies that limit the amount of credit exposure to any one financial institution.

F-15

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

FINANCIAL RISK MANAGEMENT continued

CREDIT RISK continued

Cash and cash equivalents and restricted cash

Financial institutions' credit rating by exposure

Figures in million

2015

2014

Credit rating

AAA

AA+

AA¹

AA-¹

A+¹

Cash and cash equivalents and restricted cash

177

AA-

A+

Total restricted cash

Includes restricted cash.

LIQUIDITY RISK

The following are the contractual maturities of financial liabilities (including principal and interest payments):

Figures in million

Current

Other non-current liabilities

Borrowings

Due between 0 to six months

Due between six to 12 months

Due between one to two years

Due between two to five years

255

Trade and other payables (excluding non-financial liabilities)

299

Other non-current liabilities

Borrowings

Due between 0 to six months

Due between six to 12 months

Due between one to two years

272

Due between two to five years

Trade and other payables (excluding non-financial liabilities)

274

US dollar

Environmental trust funds are held with financial institutions who have the following credit ratings: AA+ US$40.8 million (2014: US$55.6 million), AA US$135.9
million (2014: US$147.4 million) and A+ US$15.5 million (2014: US$9.3 million).

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$341.0 million as at 30 June 2015 (2014: US$459.8 million).

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the availability of funding through an adequate amount of
committed credit facilities.

In the ordinary course of business, the group receives cash from its operations and is required to fund working capital and capital expenditure requirements. The
cash is managed to ensure that surplus funds are invested in a manner to achieve market-related returns and to provide sufficient liquidity at the minimum risk.
The group is able to actively source financing at competitive rates.

The social plan trust fund of US$3.8 million (2014: US$4.4 million) has been invested in unit trusts comprising shares in listed companies.

More than 1

year

2015

2014

F-16

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

FINANCIAL RISK MANAGEMENT continued

CAPITAL RISK MANAGEMENT

The group follows a conservative approach to debt and prefers to maintain low levels of gearing. Net debt is as follows:

Figures in million

2015

2014

Cash and cash equivalents

172

Borrowings

(280)

(270)

Net debt

(192)

(98)

There were no changes to the group's approach to capital management during the year.

FAIR VALUE DETERMINATION OF FINANCIAL ASSETS AND LIABILITIES

The carrying values (less any impairment allowance) of short-term financial instruments are assumed to approximate their fair values.

The fair value levels of hierarchy are as follows:

(1)

Quoted prices (unadjusted) in active markets for identical assets (level 1);

(2)

(3)

Inputs for the asset that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the group's assets and liabilities that are measured at fair value by level at 30 June 2015.

Assets

Level 1

Level 2

Level 3

Figures in million (US dollar)

Available-for-sale financial assets¹

Fair value through profit or loss financial assets²

The following table presents the group's assets and liabilities that are measured at fair value by level at 30 June 2014.

Assets

Level 1

Level 2

Level 3

Figures in million (US dollar)

Available-for-sale financial assets¹

Fair value through profit or loss financial assets²

The 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 optimises the cost of capital and matches the current strategic business plan.

The group manages and makes adjustments to the capital structure, which consists of debt and equity, as and when borrowings mature or when funding is
required. This may take the form of raising equity, market or bank debt or hybrids thereof. In doing so, the group ensures it stays within the debt covenants agreed
with lenders. The group may also sell assets to reduce debt or schedule projects to manage the capital structure.

US dollar

¹ Refer to note 18. Level 3 fair values have been valued by the directors by performing independent valuations on an annual basis.

² Level 2 fair values are directly derived from the Shareholders Weighted Top 40 (SWIX 40) or the Top 40 index on the JSE, and are discounted at market interest rate. The fair value

of US$3.8 million (2014: US$4.5 million) of the balance in 2015 and 2014 is derived by reference to quoted prices of the shares held within the unit trust portfolio.

The fair values of the available-for-sale financial assets are determined by reference to quoted market prices. The fair value of other non-current financial
instruments is determined using a discounted cash flow model with market observable inputs, such as market interest rates.

Inputs other than quoted prices included within level 1 that are observable for the asset, either directly (that is, as prices) or indirectly (that is, derived from
other prices) (level 2);

F-17

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

COST OF SALES

Figures in million

2015

2014

2013

Production costs (a)

1 103

1 148

1 283

Amortisation and depreciation of mining assets

211

202

222

Amortisation and depreciation of assets other than mining assets (b)

Rehabilitation (credit)/expenditure (c)

(1)

(2)

Care and maintenance costs of restructured shafts (d)

Employment termination and restructuring costs (e)

Share-based payments (f)

Impairment of assets (g)

285

135

274

Other (h)

(7)

Total cost of sales

1 645

1 549

1 829

(a)

Figures in million

2015

2014

2013

Labour costs, including contractors

678

711

829

Consumables

303

317

372

Water and electricity

175

182

194

Insurance

Transportation

Change in inventory

(10)

(25)

Capitalisation of mine development costs

(133)

(139)

(153)

Stripping activities

(21)

(13)

(35)

By-product sales

(18)

(22)

(29)

Royalty expense

Other

Total production costs

1 103

1 148

1 283

(b)

(c)

(d)

(e)

(f)

(g)

Figures in million

2015

2014

2013

Hidden Valley

174

268

Doornkop

Phakisa

130

Freddies 9 (Other - underground)

Steyn 2 (Bambanani)

St Helena (Other - underground)

Total impairment of assets

285

135

274

During the 2015 financial year, the group embarked on a restructuring process at Kusasalethu, Masimong and Hidden Valley. Target 3 was placed on care and
maintenance and Ernest Oppenheimer Hospital was closed in December 2014. Voluntary severance packages were offered to management in September 2014.

For the 2014 financial year, the programme embarked on by the group's South African operations whereby voluntary severance packages were offered to all
employees and significant restructuring process at Hidden Valley, both having started during 2013, was completed in June 2014.

Refer to note 32 for details on the share-based payment schemes implemented by the group.

Following the decision to restructure Doornkop in May 2015, a revised life-of-mine plan was completed. In addition, the resource value reduced owing to the decrease in resources declared for Doornkop. The revised life-of-mine plan includes lower production levels and focuses on higher grade areas. Resources below the existing shaft infrastructure which were previously included in the additional resource value were removed. The new plan and lower resource value resulted in a lower recoverable amount and an impairment of US$85.2 million was recognised. The recoverable amount of Doornkop is US$151.8 million.

During the 2015 year, an impairment of US$173.8 million was recognised on Hidden Valley following a change in the life-of-mine plan during the annual planning process. Low US$ commodity prices and high operating costs resulted in the shortening of the life of mine of the operation. Stripping activities in the new plan have been significantly reduced, resulting in a decrease in the reserves to be mined and the lower recoverable amount at 30 June 2015. The recoverable amount of Hidden Valley is US$53.7 million.

The impairment of assets consists of the following:

US dollar

Production costs include mine production and transport and refinery costs, applicable general administrative costs, movement in inventories and ore stockpiles,
ongoing environmental rehabilitation costs and transfers for stripping activities. Employee termination costs are included, except for employee termination costs
associated with major restructuring and shaft closures, which are separately disclosed. Production costs, analysed by nature, consist of the following:

For the assumptions used to calculate the rehabilitation costs, refer to note 25. This expense includes the change in estimate for the rehabilitation provision where
a rehabilitation asset no longer exists as well as rehabilitation costs. For 2015, US$5.8 million (2014: US$5.1 million) (2013: US$7.3 million) was spent on
rehabilitation.

Included in the total for the 2015 financial year is an amount of US$1.7 million in reparation costs relating to the explosion that occurred in March 2015 at the
Brand 1A ventilation shaft, which was in the process of being rehabilitated.

Amortisation and depreciation of assets other than mining assets includes the amortisation of intangible assets.

F-18

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

COST OF SALES continued

(g) Impairment of assets continued

(h)

PROFIT ON SALE OF PROPERTY, PLANT AND EQUIPMENT

ACCOUNTING POLICY

Figures in million

2015

2014

2013

Profit on sale of property, plant and equipment

OTHER EXPENSES (NET)

Figures in million

2015

2014

2013

Foreign exchange losses - net (a)

Bad debts provision expense (b)

Bad debts written off

Other (income)/expense - net

Total other expenses (net)

(a)

(b)

OPERATING LOSS

The following have been included in operating loss:

Figures in million

2015

2014

2013

Auditor's remuneration

Made up as follows:
External
Fees - current year

Fees - other services

Total auditor's remuneration

The recoverable amounts for the impaired operations have been determined on a fair value less costs to sell basis using the assumptions per note 14 in
discounted cash flow models and attributable resource values. This is a fair value measurement classified as level 3.

For assumptions used to calculate the recoverable amounts, refer to note 14.

Other impairments include US$22.9 million on Phakisa following the annual life-of-mine plan assessments, and US$3.5 million for Freddies 9 as plans to develop
the project further at this stage have been stopped. The recoverable amounts are US$328 million and US$nil for Phakisa and Freddies 9 respectively.

For the 2013 financial year, US$6.8 million profit relates to the sale of the Merriespruit South mining right to Witwatersrand Consolidated Gold Resources Limited (Wits
Gold). Also included is a profit of US$1.7 million for the sale of the Sir Albert Medical Centre and its pharmacy. The remaining profit is the sale of scrap material
(including steel) from sites that are closed and being rehabilitated in the Free State.

During the 2014 financial year, an impairment of US$130.3 million was recognised on Phakisa. The impairment followed a change in the life-of-mine plan during
the annual planning process. The previously planned decline shaft that required significant additional capital expenditure, was removed from the life-of-mine plan.
The impairment comprised of US$123.1 million goodwill and US$7.1 million mining assets. In 2014, the recoverable amount of Phakisa was US$401.7 million.
Impairments on Steyn 2 of US$3.4 million and St Helena of US$2.0 million were recognised following the decision not to mine these operations in future. These
operations were impaired to the recoverable amount of US$nil.

US dollar

The total for 2015 includes a provision of US$1.3 million for the loan to Rand Refinery (Proprietary) Limited (Rand Refinery). Refer to notes 19 and 20 for further
details.

US dollar

Included in the total for 2015 is a loss of US$33.4 million (2014: US$15.0 million) (2013: US$39.8 million) related to the translation of the US dollar denominated
loans into SA rand (refer to note 28). In 2014, a loss of US$3.4 million was recorded, related to the Australasian intercompany loans not designated as forming
part of the net investment in the group's international operations.

Gains and losses on disposals of property, plant and equipment are determined by comparing the proceeds of the sale with the carrying amount and
are recognised in the income statement.

During the 2013 financial year, an impairment to the value of US$268.0 million was recognised for Hidden Valley. This was due to the operation's poor
performance at that stage and the reductions in the US dollar gold and silver prices.

Included in Other for the 2015 financial year is a credit of US$7.6 million relating to the reduction in employees qualifying for post-retirement benefits. Refer to
note 26. In addition, amounts relating to inventory adjustments are included in Other for the 2015, 2014 and 2013 financial years.

During the 2014 financial year, a ground swap between Joel mine and Sibanye Gold Limited's (Sibanye) Beatrix mine was completed which resulted in a non-cash
profit being recognised for the difference between carrying value of the Joel portion and the fair value of the Beatrix portion. Refer to note 27 for further detail.

F-19

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

INVESTMENT INCOME

ACCOUNTING POLICY

Figures in million

2015

2014

2013

Interest received

Loans and receivables (a)

Held-to-maturity investments

Cash and cash equivalents

South African Revenue Services (SARS)

Total investment income

(a) For the 2015 financial year, interest received on the loan to Rand Refinery amounted to US$0.5 million. Refer to note 20 for further details.

FINANCE COST

Figures in million

2015

2014

2013

Financial liabilities

Borrowings

Other creditors and liabilities

Total finance cost from financial liabilities

Non-financial liabilities

Post-retirement benefits

Time value of money and inflation component of rehabilitation costs

South African Revenue Services (SARS)

Total cost from non-financial liabilities

Total finance cost before interest capitalised

Interest capitalised (a)

(2)

(1)

(3)

Total finance cost

(a) The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation in 2015 was 3.4% (2014: 3.4%) (2013: 4.4%).

TAXATION

US dollar

Interest income is recognised 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.

Dividend income is recognised when the shareholder's right to receive payment is established. This is recognised at the last date of registration.

Cash flows from dividends and interest received are classified under operating activities in the cash flow statement.

ACCOUNTING POLICY

Taxation is made up of current and deferred taxation. The 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 are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred taxation is recognised on temporary differences existing at each reporting date between the tax base of all assets and liabilities and their carrying amounts. Substantively enacted tax rates are used to determine future anticipated effective tax rates which in turn are used in the determination of deferred taxation, except to the extent that deferred tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and does not affect the accounting or taxable profit or loss at the time of the transaction. Deferred tax is charged to profit or loss, except where the tax relates to items recognised in other comprehensive income or directly in equity in which case the tax is also recognised in other comprehensive income or directly in equity. The effect on deferred tax of any changes in tax rates is recognised 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 amortisation and depreciation on property, plant and equipment, provisions, unutilised tax losses and unutilised capital allowances carried forward. Deferred tax assets relating to the carry forward of unutilised tax losses and unutilised capital allowances are recognised to the extent that it is probable that future taxable profit will be available against which the unutilised tax losses and unutilised capital allowances can be utilised. The recoverability ofthese assets is reviewed at each reporting date and adjusted if recovery is no longer probable.

Deferred income tax is provided on temporary differences arising from investments in subsidiaries, joint ventures and associates, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Interest received from and paid to the tax authorities is classified as investment income and finance cost on the income statement.

US dollar

F-20

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

TAXATION continued

The taxation credit/(expense) for the year is as follows:

Figures in million

2015

2014

2013

SA taxation

Mining tax (a)

(3)

(37)

- current year

(1)

(5)

(37)

- prior year

Non-mining tax (b)

- current year

(1)

- prior year

Deferred tax (c)

- current year

(22)

Foreign taxation

Deferred tax

(6)

(3)

(47)

- current year (d)

(1)

(3)

- derecognition of deferred tax asset (e)

(5)

(56)

Total taxation credit/(expense)

(69)

Figures in million

2015

2014

2013

Taxation by type

Mining tax

(3)

(37)

Non-mining tax

Deferred tax

(38)

(69)

(a)

(b)

(c)

(d) Mining and non-mining income of Australian entities and PNG operation are taxed at a standard rate of 30% (2014: 30%) (2013: 30%).

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Mining tax on gold mining income in South Africa is determined according to a formula, based on the taxable income from mining operations. 5% of total revenue
is exempt from taxation while the remainder is taxable at a higher rate than non-mining income as a result of applying the gold mining formula.

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CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The group is subject to income tax in several jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome 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 judgement with regard 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 recognised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. When different tax rates apply to different levels of taxable income, deferred tax assets and liabilities are measured using the average tax rates that are expected to apply to the taxable profit (tax loss) of the periods in which the temporary differences are expected to reverse. At the group’s South African operations, such average tax rates are directly impacted by the profitability of the relevant mine. The deferred tax rate is therefore based on the current estimate of future profitability of an operation when temporary differences will reverse, based on tax rates and tax laws that have been enacted at the balance sheet date. The future profitability of each mine, in turn, is determined by reference to the life-of-mine (LoM) plan for that operation. The LoM plan is influenced by factors as disclosed in note 14, which may differ from one year to the next and normally result in the deferred tax rate changing from one year to the next.

All qualifying mining capital expenditure is deducted from taxable mining income to the extent that it does not result in an assessed loss. Accounting depreciation
is eliminated when calculating the South African mining tax income. Excess capital expenditure is carried forward as unredeemed capital to be claimed from future
mining taxable income. The group has several tax paying entities in South Africa. In terms of the mining ring-fencing application, each ring-fenced mine is treated
separately and deductions can normally only be utilised against mining income generated from the relevant ring-fenced mine.

Non-mining income of mining companies and the income for non-mining companies are taxed at the statutory corporate rate of 28% (2014: 28%) (2013: 28%).

The deferred tax rate used to calculate deferred tax is based on the current estimate of future profitability when temporary differences will reverse based on tax
rates and tax laws that have been enacted at the balance sheet date. Depending on the profitability of the operations, the deferred tax rate can consequently be
significantly different from year to year.

F-21

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

TAXATION continued

(e)

INCOME AND MINING TAX RATES

The tax rate remained unchanged for the 2013, 2014 and 2015 years.

Figures in million

2015

2014

2013

Tax on net loss at the mining statutory tax rate

148

Non-allowable deductions

(24)

(25)

(32)

Impairment of assets

(63)

(43)

Difference between effective mining tax rate and statutory mining rate on mining income

Difference between non-mining tax rate and statutory mining rate on non-mining income

Effect on temporary differences due to changes in effective tax rates¹

(21)

Prior year adjustment

Capital allowance, sale of business and other rate differences²

Derecognition of deferred tax asset³

(5)

(56)

Deferred tax asset not recognised⁴

(23)

(25)

(116)

Income and mining taxation

(69)

Effective income and mining tax rate (%)

(14)

(19)

DEFERRED TAX

The analysis of deferred tax assets and liabilities is as follows:

Figures in million

2015

2014

Deferred tax assets

(70)

(94)

Deferred tax asset to be recovered after more than 12 months

(52)

(79)

Deferred tax asset to be recovered within 12 months

(18)

(15)

Deferred tax liabilities

227

339

Deferred tax liability to be recovered after more than 12 months

212

318

Deferred tax liability to be recovered within 12 months

Net deferred tax liability

157

245

Deferred tax liabilities and assets on the balance sheet as of 30 June 2015 and 30 June 2014 relate to the following:

US dollar

Figures in million

2015

2014

Gross deferred tax liabilities

227

339

Amortisation and depreciation

227

337

Other

Gross deferred tax assets

(70)

(94)

Unredeemed capital expenditure

(41)

(59)

Provisions, including non-current provisions

(10)

(15)

Tax losses

(19)

(20)

Net deferred tax liability

157

245

Comprises:
Net deferred tax liability

157

253

Net deferred tax asset

(8)

US dollar

The recoverability of the deferred tax asset for Australia is no longer considered probable, following the revised LoM plan and impairment recognised on Hidden
Valley and as a result it was derecognised on 30 June 2015. For the 2013 financial year, the recovery of the deferred tax asset previously recognised for the
Hidden Valley operation was deemed unlikely as there are insufficient estimated future taxable profits against which it could be utilised. As a result, it was
derecognised on 30 June 2013.

Major items causing the group's income tax provision to differ from the South African mining statutory tax rate of 34% (2014: 34%) (2013: 34%) were:

¹ This relates to the decrease in the deferred tax rates related to Freegold (Harmony) Pty Ltd (Freegold) (20.3% to 16.7%) and Randfontein Estates Limited (Randfontein) (18.9% to 14.3%) mainly due to the lower estimated profitability. In 2014, the significant decreases in the deferred tax rates related to Harmony Gold Mining Company Limited (Harmony) (26.4% to 13.4%) and Freegold (22.9% to 20.3%) mainly due to the lower estimated profitability. In 2013, the significant decreases related to Freegold (24.3% to 22.9%) and Randfontein (18.6% to 17.4%).

² This relates to the additional capital allowance that may be deducted from taxable income from mining operations in South Africa. A significant portion relates to Avgold Limited (Avgold), which has a 0% effective tax rate.

⁴ This relates primarily to the Hidden Valley operation and represents tax losses and deductible temporary difference arising in the year for which future taxable profits are not considered probable.

³ In 2015, the Australian deferred tax asset was derecognised as the recoverability is deemed unlikely following the revised LoM for Hidden Valley. For the 2013 financial year, represents the derecognition of the previously recognised deferred tax asset in respect of tax losses for the Hidden Valley operation for which future taxable profits are no longer considered probable.

F-22

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

TAXATION continued

DEFERRED TAX continued

Movement in the net deferred tax liability recognised in the balance sheet is as follows:

Figures in million

2015

2014

Balance at beginning of year

245

293

Credit per income statement

(61)

(29)

Tax directly charged to other comprehensive income

(1)

Foreign currency translation

(27)

(18)

Balance at end of year

157

245

As at 30 June, the group had the following potential future tax deductions:

Figures in million

2015

2014

Unredeemed capital expenditure utilisable against future mining taxable income¹

1 891

2 028

Tax losses carried forward utilisable against mining taxable income²

339

280

Capital Gains Tax (CGT) losses available to be utilised against future CGT gains^3,5

As at 30 June, the group has not recognised the following deferred tax asset amounts relating to the above

595

626

The unrecognised temporary differences are:

Unredeemed capital expenditure⁴

1 617

1 726

Tax losses

202

189

CGT losses³

DIVIDEND TAX (DT)

DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS

ACCOUNTING POLICY

US dollar

¹ Includes Avgold US$1 004.2 million (2014: US$1 046.2 million), Freegold US$111.4 million (2014: US$140.1 million), Randfontein US$152.3 million (2014: US$158.9 million) and Hidden Valley US$613.5 million (2014: US$680.2 million). These have an unlimited carry-forward period.

² These have an unlimited carry-forward period.

³ The CGT losses relate to the gross CGT losses available to be utilised against future CGT gains.

⁴ Relates to Avgold and Hidden Valley.

A withholding tax of 15% on dividends (excluding a return of capital) and other distributions to the beneficial owners of shares (shareholders) became effective on 1
April 2012. DT is withheld by the company declaring the dividend or the withholding agent, unless specifically exempt. Foreign residents could qualify for an exemption
or a reduced DT rate in terms of their relevant tax treaty. The withholding tax is a tax on the shareholder and if applicable will be withheld by the company and will
reduce the amount paid to the shareholder.

A non-current asset or disposal group (a business grouping of assets and their related liabilities) is designated as held for sale and stated at lower of carrying value
and fair value less cost to sell, when its carrying amount will be recovered principally through a sale transaction rather than through continuing use. The classification
as held for sale of a non-current asset or disposal group occurs when it is available for immediate sale in its present condition and the sale is highly probable. A sale is
considered highly probable if management is committed to a plan to sell the non-current asset or disposal group, an active divestiture programme has been initiated,
the non-current assets or disposal group are 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 cost to sell). At each subsequent reporting
date, the carrying values are remeasured for possible impairment. A reversal of impairment is recognised for any subsequent increase in net selling price but not in
excess of the cumulative impairment loss already recognised.

No depreciation is provided on non-current assets from the date they are classified as held for sale. Where an investment in associate is classified as held for sale, the
group will no longer equity account for the investment.

When a disposal group is classified as held for sale it is also necessary to assess whether or not the criteria for discontinued operations are met. If the criteria are met,
the results of the disposal group are classified as discontinued operations in the income statement and the comparative amounts restated for all periods presented. No
restatement of balance sheet comparative amounts is done.

The assets and liabilities of Evander Gold Mines Limited (Evander), a wholly owned subsidiary of Harmony Gold Mining Company Limited (Harmony), were classified
as held for sale following the signing of a sale of shares and claims agreement on 30 January 2012. On 30 May 2012, Harmony announced the signing of a new sale
of shares and claims agreement with Pan African Resources plc (Pan African).

All conditions precedent to the sale were fulfilled and the transaction was completed on 28 February 2013. The purchase consideration of US$170.0 million was
adjusted for distributions received prior to the effective date of US$23.4 million. A group profit of US$11.4 million was recorded.

There were no assets or liabilities of the operations classified as held for sale at 30 June 2014 and 30 June 2015.

F-23

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS continued

The analysis of the results and cash flows of discontinued operations are disclosed in the tables below:

Figures in million

2015

2014

2013

Income statement
Revenue

102

Cost of sales

(68)

Expenses - net

(1)

Profit on sale of investment in subsidiary

Profit from discontinued operations before tax

Taxation

(8)

Profit for the year from discontinued operations

Cash flows
Operating cash flows

Investing cash flows

123

Total cash flow from discontinued operations

155

EARNINGS/(LOSS) PER SHARE

BASIC LOSS PER SHARE

2015

2014

2013

Ordinary shares in issue ('000)

436 187

435 825

435 290

Adjustment for weighted number of ordinary shares in issue ('000)

(185)

(287)

(733)

Weighted number of ordinary shares in issue ('000)

436 002

435 538

434 557

Treasury shares ('000)

(1 578)

(2 326)

(2 676)

Basic weighted average number of shares in issue ('000)

434 424

433 212

431 881

2015

2014

2013

Net loss from continuing operations

(374)

(118)

(260)

Net profit from discontinued operations

Total net loss attributable to shareholders (millions)

(374)

(118)

(224)

Basic loss per share from continuing operations (cents)

(86)

(27)

(60)

Basic earnings per share from discontinued operations (cents)

Total basic loss per share (cents)

(86)

(27)

(52)

DILUTED LOSS PER SHARE

2015

2014

2013

Weighted average number of ordinary shares in issue ('000)

434 424

433 212

431 881

Potential ordinary shares ('000)

3 667

1 503

836

Weighted average number of ordinary shares for diluted earnings per share ('000)

438 091

434 715

432 717

2015

2014

2013

Diluted loss per share from continuing operations (cents)

(86)

(27)

(60)

Diluted earnings per share from discontinued operations (cents)

Total diluted loss per share (cents)

(86)

(27)

(52)

DIVIDENDS

ACCOUNTING POLICY

Dividends declared are recognised in the period in which they are approved by the board of directors. Dividends are payable in South African rand.

Cash flows from dividends paid are classified under financing activities in the cash flow statement.

No dividends were declared for the years ended 30 June 2015 and 30 June 2014.

For diluted earnings/(loss) per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive ordinary
shares as a result of share options granted to employees under the share option schemes in issue. A calculation is performed to determine the number of shares that
could have been acquired at fair value, determined as the average annual market share price of the company's shares, based on the monetary value of the
subscription rights attached to the outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been
issued assuming the exercise of the share options.

The inclusion of share options issued to employees, as potential ordinary shares, has a dilutive effect on the earnings/(loss) per share. The issue price and the
exercise price include the fair value of any service to be supplied to the entity in the future under the share option or other share-based payment arrangement.

US dollar

Basic earnings/(loss) per share is calculated by dividing the net income attributable to shareholders by the weighted number of ordinary shares in issue during the
year.

US dollar

F-24

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

EARNINGS/(LOSS) PER SHARE continued

DIVIDENDS continued

Figures in million

2015

2014

2013

Dividend declared

Dividend per share (cents)

On 13 August 2012, the board declared a dividend of 50 SA cents (US$6.2 cents) per share related to the year ended 30 June 2012. An interim dividend for the year
ended 30 June 2013 of 50 SA cents (US$5.7 cents) per share was declared on 1 February 2013.

US dollar

F-25

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROPERTY, PLANT AND EQUIPMENT

Figures in million

2015

2014

Mining assets (a)

1 862

2 495

Mining assets under construction (b)

104

Undeveloped properties (c)

445

511

Other non-mining assets (d)

Total property, plant and equipment

2 430

3 116

(a) Mining assets

ACCOUNTING POLICY

Depreciation

Impairment
Testing for impairment is done in terms of the group policy as discussed in note 2.5.

Stripping activities

The removal of waste material after the point at which a mine is capable of commercial production is referred to as production stripping.

US dollar

Mining assets including mine development costs and mine plant facilities are initially recorded at cost, whereafter they are measured at cost less
accumulated depreciation and impairment. Costs include expenditure that is directly attributable to the acquisition of the items. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the group and the cost of the item can be measured reliably.

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. Mineral and surface use rights represent 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 capitalised 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.

The group’s mineral use rights are enforceable regardless of whether proved or probable reserves have been established. In certain limited situations,
the nature of use changes from an exploration right to a mining right upon the establishment of proved and probable reserves. The group has the ability
and intent to renew mineral use rights where the existing term is not sufficient to recover all identified and valued proved and probable reserves and/or
undeveloped mineral interests.

Depreciation of mining assets is computed principally by the units-of-production method over life-of-mine based on estimated quantities of economically
recoverable proved and probable reserves, which can be recovered in future from known mineral deposits.

In most instances, proved and probable reserves provide the best indication of the useful life of the group’s mines (and related assets). However, in
some instances, proved and probable reserves may not provide a realistic indication of the useful life of the mine (and related assets). This may be the
case, for example, where management is confident that further inferred resources will be converted into measured and indicated resources and if they
are economically recoverable, they can also be classified as proved and probable reserves. Management is approaching economic decisions affecting
the mine on this basis, but has chosen to delay the work required to designate them formally as reserves.

In assessing which resources to include so as to best reflect the useful life of the mine, management considers resources that have been included in the
life-of-mine plan. To be included in the life-of-mine plan, resources need to be above the cut-off grade set by management, which means that the
resource can be economically mined and is therefore commercially viable. This consistent systematic method for inclusion in the life-of-mine plan takes
management’s view of the gold price, exchange rates as well as cost inflation into account. In declaring the resource, management would have had to
obtain a specified level of confidence of the existence of the resource through drilling as required by the South African Code for Reporting Exploration
Results, Mineral Resources and Mineral Reserves (SAMREC).

Additional confidence in the existence, commercial viability and economical recovery of such resources may be based on historical experience and
available geological information, such as geological information obtained from other operations that are contiguous to the group’s as well as where the
group mines continuations of these other operations’ orebodies and reefs. This is in addition to the drilling results obtained by the group and
management’s knowledge of the geological setting of the surrounding areas, which would enable simulations and extrapolations to be done with a
reasonable degree of accuracy.

In instances where management is able to demonstrate the economic recovery of such resources with a high level of confidence, such additional
resources, which may also include certain, but not all, of the inferred resources, as well as the associated future development costs of accessing those
resources, are included in the calculation of depreciation. The future development costs are those costs that need to be incurred to access these
inferred resources, for example the costs to complete a decline or level, which may include infrastructure and equipping costs. These amounts have
been extracted from the cash flow projections for the life-of-mine plans.

Mineral rights associated with production phase mineral interests are amortised over the life of mine using the units-of-production method in order to
match the amortisation with the expected underlying future cash flows.

The removal of overburden and other mine waste materials is often necessary during the initial development of a mine site, in order to access the
mineral ore deposit. The directly attributable cost of this activity is capitalised in full within mining assets under construction, until the point at which the
mine is considered to be capable of commercial production.

When the waste removal activity improves access to ore extracted in the current period, the costs of production stripping are charged to the income
statement as operating costs in accordance with the principles of IAS 2 Inventories.

F-26

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROPERTY, PLANT AND EQUIPMENT continued

(a) Mining assets continued

ACCOUNTING POLICY continued

Stripping activities continued

Scrapping of assets

• The level of capital expenditure compared to the total project cost estimates;
• The ability to produce gold in a saleable form (where more than an insignificant amount of gold has been produced); and
• The ability to sustain the ongoing production of gold.

Estimating the quantities and/or grade of the reserves and resources requires the size, shape and depth of the orebodies to be determined by analysing
geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations
to interpret the data.

Because the economic assumptions used to estimate the gold mineral reserves and resources change from year to year, and because additional
geological data is generated during the course of operations, estimates of the mineral reserves and resources may change from year to year. Changes
in the reserves and resources may affect the group’s financial results and financial position in a number of ways, including:

• Asset carrying values may be affected due to changes in estimated cash flows;
• Scrapping of assets to be recorded in the income statement, following the derecognition of assets as no future economic benefit expected;
• Depreciation and amortisation 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; and
• Useful life and residual values may be affected by the change in mineral reserves.

At the end of each financial year, the estimate of proved and probable gold mineral reserves and resources is updated. Depreciation of mining assets is
prospectively adjusted, based on these changes.

The group includes certain inferred resources in the denominator and future development costs in the numerator when performing the depreciation
calculation for certain of its operations, where proved and probable reserves alone do not provide a realistic indication of the useful life of mine (and
related assets). During the periods presented, this related to the Doornkop South Reef and Masimong shafts. Had the group only used proved and
probable reserves in its calculations, depreciation for 2015 would have amounted to US$226.4 million (2014: US$217.6 million) (2013: US$241.2
million), compared with the reported totals of US$215.8 million (2014: US$207.0 million) (2013: US$226.9 million).

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – GOLD MINERAL RESERVES AND
RESOURCES

SENSITIVITY ANALYSIS - GOLD MINERAL RESERVES AND RESOURCES EFFECT ON
DEPRECIATION

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – PRODUCTION START DATE

Various 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:

Where production stripping activity both produces inventory and improves access to ore in future periods the associated costs of waste removal are
allocated between the two elements. The portion which benefits future ore extraction is capitalised within stripping and development capital expenditure.
If the amount to be capitalised cannot be specifically identified it is determined based on the volume of waste extracted compared with expected volume
for the identified component of the orebody. Components are specific volumes of a mine’s orebody that are determined by reference to the life-of-mine
plan.

In certain instances significant levels of waste removal may occur during the production phase with little or no associated production. The cost of this
waste removal is capitalised in full.

All amounts capitalised in respect of waste removal are depreciated using the units-of-production method based on proved and probable ore reserves of
the component of the orebody to which they relate.

The effects of changes to the life-of-mine plan on the expected cost of waste removal or remaining reserves for a component are accounted for
prospectively as a change in estimate.

Where significant adverse changes have taken place relating to the useful life of an asset, that asset is tested for impairment in terms of the group policy
as discussed in note 2.5. Whether or not an impairment is recognised, it is then necessary to review the useful lives and residual values of the assets
within the CGU – this is reviewed at least annually. Where necessary, the useful lives and residual values of the individual assets are revised.

Where the useful life of an asset is nil as a result of no future economic benefit expected from the use or disposal of that asset, it is necessary to
derecognise the asset. The loss arising from the derecognition is included in profit or loss in the period in which the asset was derecognised.

Gold mineral reserves and resources are estimates of the amount of ounces that can be economically and legally extracted from the group’s properties.
In order to calculate the gold mineral reserves and resources, estimates and assumptions are required about a range of geological, technical and
economic factors, including quantities, grades, production techniques, recovery rates, production costs, commodity prices and exchange rates.

F-27

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROPERTY, PLANT AND EQUIPMENT continued

(a) Mining assets continued

2014

Short term

Medium term

Long term

Short term

Medium term

Long term

Year 1

Year 2

Year 3+

Year 1

Year 2

Year 3+

US$ gold price per ounce

1 150

1 180

1 200

1 300

1 250

1 300

1 400

US$ silver price per ounce

14.00

14.50

17.00

21.00

20.00

21.00

23.00

Exchange rate (R/US$)

12.17

11.86

11.66

10.17

9.95

9.57

8.89

Exchange rate (PGK/US$)

2.75

2.27

2.22

2.28

2.32

Rand gold price (R/kg)

450 000

425 000

400 000

2015

2014

2013

2015

2014

2013

Measured

40.86

45.40

n/a

n/a

n/a

Indicated

23.35

25.94

n/a

15.00

76.79

87.95

Inferred

5.84

6.49

20.00

6.00

25.00

27.00

Should management’s estimate of the future not reflect actual events, further impairments may be identified.
Factors affecting the estimates include:
• Changes to proved and probable ore reserves;
• Economical recovery of resources;
• The grade of the ore reserves may vary significantly from time to time;
• Review of strategy;
• Unforeseen operational issues at the mines;
• Differences between actual commodity prices and commodity price assumptions;
• Changes in the discount rate and foreign exchange rates; and
• Changes in capital, operating mining, processing and reclamation costs.

SENSITIVITY ANALYSIS - IMPAIRMENT OF ASSETS

The sensitivity scenario of a 10% decrease in the commodity prices in the discounted cash flow models and the resource values used would have
resulted in an additional impairment at 30 June 2015 for Phakisa of US$103.1 million, Doornkop of US$75.9 million and Hidden Valley of US$37.9
million. The decreases noted would have resulted in impairments at Target 1 of US$77.1 million, Target 3 of US$2.7 million, Tshepong of US$57.0
million (of which US$47.8 million is goodwill), Unisel of US$0.5 million and other Harmony assets of US$32.3 million.

2015

The post-tax real discount rate for Hidden Valley was 12.03% (2014: 9.33%) (2013: 8.52%) and the post-tax real discount rates for the South African
operations ranged between 7.99% and 11.38% (2014: 7.03% and 11.56%) (2013: 6.21% and 10.20%), depending on the asset, were used to determine
the recoverable amounts (generally fair value less costs to sell). 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. The attributable gold resource value assumptions:

US dollar per ounce

2013

South Africa

Hidden Valley

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS – IMPAIRMENT OF ASSETS

The recoverable amount of mining assets is generally determined utilising real discounted future cash flows.

Management also considers such factors as the quality of the individual orebody, market risk, asset specific risks and country risk in determining the fair
value.

Key assumptions for the calculations of the mining assets’ recoverable amounts are the commodity prices, resource values, marketable discount rates,
costs to sell, exchange rates and the annual life-of-mine plans. In determining the commodity prices and resource values to be used, management
assesses the long-term views of several reputable institutions on commodity prices and based on this, derives the commodity prices and resource
values. The life-of-mine plans are based on the proved and probable reserves as included in the Reserve Declaration, which are determined in terms of
SAMREC and The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC), as well as resources where
management has high confidence in the orebody and economical recovery of gold, based on historic and similar geological experience.

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
and the following gold price, silver price and exchange rates assumptions:

F-28

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROPERTY, PLANT AND EQUIPMENT continued

(a) Mining assets continued

The movement in the mining assets balance is as follows:

Figures in million

2015

2014

Cost
Balance at beginning of year

4 181

4 060

Elimination of fully depreciated and impaired assets no longer in use

(55)

(7)

Additions

207

227

Disposals

(4)

Scrapping of assets

(83)

Adjustment to rehabilitation asset

Transfers and other movements

151

Translation

(527)

(251)

Balance at end of year

3 731

4 181

Accumulated depreciation and impairments
Balance at beginning of year

1 686

1 569

Elimination of fully depreciated and impaired assets no longer in use

(55)

(7)

Impairment of assets

285

Disposals

(3)

Scrapping of assets

(41)

Depreciation

215

206

Transfers and other movements

(1)

Translation

(217)

(95)

Balance at end of year

1 869

1 686

Net carrying value

1 862

2 495

Scrapping of assets

Stripping activities

(b) Mining assets under construction

ACCOUNTING POLICY

During the 2015 financial year, Harmony management embarked on a life-of-mine optimisation process in respect of the South African operations. The
optimisation ensured greater focus on mining profitable and higher grade areas at our operations and therefore resulted in the abandonment of lower
grade and unprofitable areas from the life-of-mine plan for certain of the operations. A loss on scrapping of US$42.2 million (2014: US$nil) (2013: US$nil)
was recorded.

The abandonment of unprofitable areas in the plans resulted in the derecognition of property, plant and equipment as no future economic benefits are
expected from their use or disposal and a loss on scrapping of property, plant and equipment amounting to US$20.2 million and US$19.8 million was
recorded for Kusasalethu and Masimong respectively. Losses of US$1.9 million and US$0.3 million were also recorded for Tshepong and Phakisa.

Included in the balance for mining assets is an amount of US$2.5 million (2014: US$43.2 million) for stripping activities. Depreciation of US$24.8 million
(2014: US$19.4 million) and impairment of US$32.3 million (2014: US$nil) related to Hidden Valley were recorded for these activities.

At the group’s surface mines, when it has been determined that a mineral property can be economically developed as a result of establishing proved and
probable reserves, costs incurred to develop the property are capitalised as incurred until the mine is considered to have moved into the production
phase. These costs include costs to further delineate the orebody and remove overburden to initially expose the orebody. 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 capitalised to
the extent that such costs will provide future economic benefits. These costs include the cost of shaft sinking and access, the costs of building access
ways, lateral development, drift development, ramps, box cuts and other infrastructure development.

Borrowing costs are capitalised 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 capitalised until the asset moves into the production phase.
Other borrowing costs are expensed.

Where a depreciable asset is used in the construction or extension of a mine, the depreciation is capitalised against the mine’s cost.

Exploration properties acquired are recognised in the balance sheet within development cost and are shown at cost less provisions for impairment
determined in accordance with the group’s accounting policy on impairment of non-financial assets.

Mineral interests associated with development and exploration phase mineral interests are not amortised until such time as the underlying property is
converted to the production stage.

Capitalisation of pre-production costs ceases when commercial levels of production are reached. Commercial levels of production are discussed under
“production start date” above.

US dollar

F-29

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROPERTY, PLANT AND EQUIPMENT continued

(b) Mining assets under construction continued

The movement in the mining assets under construction balance is as follows:

Figures in million

2015

2014

Cost
Balance at beginning of year

203

Additions

Finance costs capitalised¹

Disposals

Transfers and other movements

(11)

(112)

Translation

(14)

(18)

Balance at end of year

104

¹ The average capitalisation rate applied was 3.4% (2014: 3.4%).

(c) Undeveloped properties

ACCOUNTING POLICY

The movement in the undeveloped properties balance is as follows:

Figures in million

2015

2014

Cost
Balance at beginning of year

512

582

Transfers and other movements

(39)

Translation

(66)

(31)

Balance at end of year

446

512

Accumulated depreciation and impairments
Balance at beginning of year

Transfers and other movements

Translation

Balance at end of year

Net carrying value

445

511

(d) Other non-mining assets

ACCOUNTING POLICY

US dollar

Undeveloped properties are initially valued at the fair value of resources obtained through acquisitions. The carrying values 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.

Land is shown at cost and not depreciated. Other non-mining fixed assets are shown at cost less accumulated depreciation and accumulated
impairment losses.

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.

US dollar

F-30

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROPERTY, PLANT AND EQUIPMENT continued

(d) Other non-mining assets continued

The movement in the other non-mining assets balance is as follows:

Figures in million

2015

2014

Cost
Balance at beginning of year

Elimination of fully depreciated and impaired assets no longer in use

(20)

(2)

Additions

Transfers and other movements

Translation

(4)

(3)

Balance at end of year

Accumulated depreciation and impairments
Balance at beginning of year

Elimination of fully depreciated and impaired assets no longer in use

(20)

(2)

Depreciation

Transfers and other movements

Translation

(1)

(2)

Balance at end of year

Net carrying value

INTANGIBLE ASSETS

ACCOUNTING POLICY

Figures in million

2015

2014

Goodwill (a)

Technology-based assets (b)

Total

US dollar

Intangible assets consist of all identifiable non-monetary assets without physical substance. They are stated at cost less accumulated amortisation and
accumulated impairment losses, if any. The following are the main categories of intangible assets:

Goodwill

Goodwill is an intangible asset with an indefinite useful life which is not amortised but tested for impairment on an annual basis, or when there is an
indication of impairment. The excess of consideration transferred over the amount of any non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded as
goodwill. Goodwill on acquisition of subsidiaries, joint ventures and businesses is 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. Goodwill is allocated to cash-generating units for the
purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose. If the composition of one or more cash-generating units to which goodwill has been allocated
changes due to a re-organisation, the goodwill is re-allocated to the units affected.

The gain or loss on disposal of an entity includes the carrying amount of goodwill relating to the entity sold.

Technology-based assets

Acquired computer software licences that require further internal development are capitalised on the basis of costs incurred to acquire and bring to use
the specific software. These technology-based assets are classified as intangible assets with a finite useful life. These assets are amortised on a straight-
line basis over their estimated useful lives, which are reviewed annually, as follows:
• Computer software at 20% per year.

Due to the wasting nature of mining assets and the finite life of a mine's reserves, the allocation of goodwill to a shaft will eventually result in an
impairment charge for the goodwill. The group tests annually whether separately identifiable goodwill has suffered any impairment in accordance with the
accounting policy stated in note 2.5. These calculations use estimates as per note 14.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS - IMPAIRMENT OF GOODWILL

US dollar

F-31

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

INTANGIBLE ASSETS continued

(a) Goodwill

Figures in million

2015

2014

Cost
Balance at beginning of year

224

238

Translation

(29)

(14)

Balance at end of year

195

224

Accumulated amortisation and impairments
Balance at beginning of year

144

Impairment for the year¹

123

Translation

(19)

(1)

Balance at end of year

125

144

Net carrying value

The net carrying value of goodwill has been allocated to the following cash-generating units:

Bambanani

Tshepong

Joel

Net carrying value

(b)

Technology-based assets

Figures in million

2015

2014

Cost
Balance at beginning of year

Additions

Translation

(2)

(1)

Balance at end of year

Accumulated amortisation and impairments
Balance at beginning of year

Amortisation charge for the year

Translation

(1)

(1)

Balance at end of year

Net carrying value

US dollar

ACCOUNTING POLICY - FINANCIAL ASSETS (APPLICABLE TO NOTES 16, 17, 18 AND 19)

Financial assets are initially measured at fair value when the group becomes a party to their contractual arrangements, with the exception of loans and
receivables which are recognised on origination date. 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 assets is discussed below.

A financial asset is derecognised 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.

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 recognised in equity is recognised in profit or loss.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the
recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

¹ The goodwill of Phakisa amounting to US$123.2 million, was impaired on 30 June 2014 as the carrying value exceeded the fair value less costs to sell of the cash-generating

unit. Refer to note 14 for details of the assumptions used in the impairment test.

Technology-based assets includes computer software and intellectual property which has been acquired and developed for the group. These assets are
amortised over five years.

US dollar

F-32

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

ACCOUNTING POLICY - FINANCIAL ASSETS (APPLICABLE TO NOTES 16, 17, 18 AND 19) continued

The group classifies financials assets as follows:

A portion of restricted investments held by the environmental trust funds (refer to note 17) are classified as held-to-maturity investments.

RESTRICTED CASH

Figures in million

2015

2014

Non-current

Environmental guarantees (a)

Lease security deposits

Current

Environmental rehabilitation (b)

Total restricted cash

(a)

(b)

RESTRICTED INVESTMENTS

Figures in million

2015

2014

Investments held by environmental trust funds (a)

192

213

Investments held by social trust funds (b)

Total restricted investments

196

217

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the group’s
management has the positive intention and ability to hold to maturity. The group’s held-to-maturity investments are subsequently measured at
amortised cost using the effective interest method. The group assesses at the end of each reporting period whether there is objective evidence that
a held-to-maturity investment is impaired as a result of an event.

Financial assets at fair value through profit or loss have two sub-categories: financial assets held-for-trading, and those designated at fair value
through profit or loss at inception. These assets are subsequently measured at fair value with gains or losses arising from changes in fair value
recognised in the income statement in the period in which they arise.

The amount relates to funds set aside to serve as collateral against guarantees made to the Department of Mineral Resources (DMR) in South
Africa for environmental and rehabilitation obligations. Refer to note 25. A portion of the funds are held on call account and the balance is invested in
money market funds.

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 amortised cost using the effective interest method. Loans and receivables include trade and other receivables (excluding
VAT and prepayments), restricted cash and cash and cash equivalents.

US dollar

The amount relates to monies released from the environmental trust funds as approved by the DMR. These funds may only be used for further
rehabilitation.

Cash 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.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised 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. 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 recognised 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.

•

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of
the balance sheet date.

Available-for-sale financial assets are subsequently carried at fair value. The fair values of quoted investments are based on current bid prices. If the
fair value for a financial instrument cannot be obtained from an active market, the group establishes fair value by using valuation techniques.

The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.
In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is
considered in determining whether the securities are impaired. If considered impaired, the cumulative loss is removed from other reserves and
recognised in the income statement. Subsequent increases in the fair value are recognised in equity as impairment losses recognised in the income
statement are not reversed through the income statement.

F-33

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

RESTRICTED INVESTMENTS continued

(a) Environmental trust funds

The environmental trust funds consist of:

Figures in million

2015

2014

Held-to-maturity financial assets

113

103

Cash and cash equivalents (loans and receivables)

Fair value through profit or loss financial assets

Total environmental trust funds

192

213

ACCOUNTING POLICY

Reconciliation of the movement in the investments held by environmental trust funds:

Figures in million

2015

2014

Balance at beginning of year

213

201

Interest income

Fair value gain

Withdrawal of funds

(4)

(1)

Equity-linked deposits matured

(22)

(40)

Acquisition/(maturity) of held-to-maturity investments

Net acquisition of cash and cash equivalents

Contributions made

Translation

(29)

(11)

Balance at end of year

192

213

(b) The social trust fund

Reconciliation of the movement in the investments held by the social trust fund:

Figures in million

2015

2014

Balance at beginning of year

Interest income

Fair value gain

Claims paid

Translation

(1)

Balance at end of year

US dollar

The environmental trust funds are irrevocable trusts under the group's control. Contributions to the trusts are invested in interest-bearing short-term and
medium-term cash investments and medium term equity-linked notes issued by commercial banks that provide guaranteed interest and additional
interest or growth linked to the growth of the Shareholder Weighted Top 40 (SWIX 40) or the Top 40 index of the JSE. The equity-linked notes are
designated fair value through profit or loss investments and recorded at fair value whilst the interest-bearing short-term investments are classified either
as held-to-maturity and recorded at amortised cost or as cash and cash equivalents and recorded at fair value. These investments provide for the
estimated cost of rehabilitation at the end of the life of the group's mines. Income earned on the investments is retained in the funds and reinvested.

The social trust fund is an irrevocable trust under the group's control. The group undertook to donate over a period of 10 years to The Harmony Gold
Mining Group Social Plan Trust in terms of an agreement signed on 3 November 2003. An initial donation of US$2.7 million was made during the 2004
year. Thereafter instalments of R3.5 million per annum were made with the final instalment 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 as to avoid or minimise the effect of job losses and a decline in
employment through turnaround or redeployment strategies.

The social trust fund investment comprises a unit trust portfolio that is exposed to the fair value changes in the equity market and is classified as a fair
value through profit or loss investment.

Contributions are made to the group's environmental trust funds, created in accordance with statutory requirements, to fund the estimated cost of
pollution control, rehabilitation and mine closure at the end of the life of the group's mines. The trusts are consolidated into the group as the group
exercises control of the trusts. The measurement of the investments held by the trust funds is dependent on their classification under financial assets.
Income received and gains are treated in accordance with these classifications.

F-34

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

INVESTMENTS IN FINANCIAL ASSETS

Figures in million

2015

2014

Available-for-sale financial assets
Balance at beginning of year

Fair value movement of available-for-sale investments (a)

Additions

Disposals (a)

(5)

Translation

(1)

Balance at end of year

(a)

TRADE AND OTHER RECEIVABLES

Figures in million

2015

2014

Current assets

Financial assets

Trade receivables (gold)

Other trade receivables

Provision for impairment

(5)

(6)

Trade receivables - net

Loans to associates and joint arrangements

Interest and other receivables (a)

Employee receivables

Non-financial assets

Prepayments

Value added tax

Total current trade and other receivables

Non-current assets

Financial assets

Loans to associates (b)

Provision for impairment (b)

(10)

(11)

Total non-current trade and other receivables

(a)

(b)

The movement in the provision for impairment of current trade and other receivables during the year was as follows:

Figures in million

2015

2014

Balance at beginning of year

Impairment loss recognised

Reversal of impairment loss

Translation

(1)

Balance at end of year

US dollar

At the end of 2015 and 2014, all investments are unlisted shares and 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.

US dollar

No impairment allowance is necessary in respect of any balances included in interest and other receivables as all amounts are classified as fully
performing.

(ii) Included in the 2015 balance is a loan of US$9.5 million (2014: US$10.9 million) owed by Pamodzi Gold Limited (Pamodzi). Pamodzi was placed
into liquidation during 2009 and the loan was provided in full. Harmony is a concurrent creditor in the Pamodzi Orkney liquidation.

Included in the amount for 2014 is a net increase in fair value of US$0.7 million for the investment in Wits Gold. During 2014, a cash offer for Wits
Gold's entire share capital was made to all Wits Gold shareholders by Sibanye. Harmony accepted the offer and on 14 April 2014 a total
consideration of US$4.9 million was received. The accumulated gain of US$1.3 million recognised in equity was reclassified to the income
statement, resulting in a profit on disposal.

Included in the balance for the 2014 financial year is the self-insurance fund of US$16.3 million. The self-insurance fund was terminated during the
2015 financial year.

(i) During 2015, Rand Refinery drew down on the facility provided by its shareholders. Harmony's portion of the shareholders' loan was US$10
million. As the loan is considered to be part of the net investment in the associate, Harmony's share of Rand Refinery's losses of US$2.1 million was
recorded against the loan. At year end, the loan was tested for impairment and an amount of US$1.2 million was provided for. Refer to note 20 for
more details.

F-35

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

TRADE AND OTHER RECEIVABLES continued

The movement in the provision of loans receivable during the year was as follows:

Figures in million

2015

2014

Balance at beginning of year

Impairment loss recognised

Translation

(2)

(1)

Balance at end of year

The ageing of trade receivables at the reporting date was:

Figures in million

Gross

30 June 2015

Fully performing

Past due by 1 to 30 days

Past due by 31 to 60 days

Past due by 61 to 90 days

Past due by more than 90 days

Past due by more than 361 days

30 June 2014

Fully performing

Past due by 1 to 30 days

Past due by 31 to 60 days

Past due by 61 to 90 days

Past due by more than 90 days

Past due by more than 361 days

The ageing of loans receivable at the reporting date was:

Figures in million

Gross

30 June 2015

Fully performing

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 361 days

30 June 2014

Fully performing

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 361 days

During the 2015 and 2014 years there was no renegotiation of the terms of any receivable.

As at 30 June 2015 and 30 June 2014, there was no collateral pledged or held for any of the receivables.

Impairment

Based on past experience, the group believes that no impairment allowance is necessary in respect of fully performing receivables as the amount relates
to customers that have a good track record with the group. The majority of fully performing trade receivables are indirectly associated with financial
institutions of good credit quality. Similarly, the other loans and receivables noted above, other than those provided for, are fully performing and
considered to be a low credit risk.

US dollar

Impairment

US dollar

F-36

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

INVESTMENTS IN ASSOCIATES

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

(a)

(b)

(i)

Figures in million

2015

2014

Balance at beginning of year

Share of losses

(10)

Translation

(1)

Balance at end of year

(ii)

The movement in the loan to associate during the year is as follows:

Figures in million

2015

2014

Balance at beginning of year

Draw down

Interest accrued

Interest received

(1)

Share of losses

(2)

Impairment recognised

(1)

Balance at end of year

US dollar

Harmony acquired a 32.4% interest in Pamodzi on 27 February 2008, initially valued at US$46.5 million. Pamodzi was listed on the JSE and had
interests in operating gold mines in South Africa. Pamodzi was placed in liquidation in March 2009 and the trading of its shares on the JSE was
suspended. As at 30 June 2015, the liquidation process has not been concluded. No financial information subsequent to 31 March 2009 is available
and therefore no information has been disclosed.

As a precautionary measure following the challenges experienced by the implementation of the software system, Rand Refinery's shareholders
have extended Rand Refinery an irrevocable, subordinated loan facility of up to US$114.2 million. The facility is convertible to equity after a period of
two years. Harmony's maximum commitment in terms of this facility is US$13.3 million. The agreements relating to the facility were signed on 23
July 2014. In December 2014, Rand Refinery drew down US$88.1 million on the shareholders' loan. Harmony's portion of the shareholders' loan
drawn down was US$10.4 million. Interest on the facility is JIBAR plus a margin of 3.5%. During the 2015 financial year, interest received on the
drawn loan amounted to US$0.5 million.

Following the finalisation of Rand Refinery's 2013 and 2014 audited financial statements, which accounted for the known inventory discrepancy at
that date, Harmony has recorded a further US$2.1 million loss against the loan to Rand Refinery (loan to associate) for its share of Rand Refinery's
losses. The loan, in substance, forms part of Harmony's net investment in Rand Refinery.

At 30 June 2015, the loan to associate was tested for impairment and a provision for impairment of US$1.2 million was required. This impairment is
included in "Other expenses (net)" in the income statement.

The investments in associates are evaluated annually for impairment by comparing the entire carrying value of the investment (including loans to
associates) to the recoverable amount, which is the higher of value in use or fair value less costs to sell. Discounted cash flow models are used to
calculate the net present value of the investments. The cash flows in the models include expected interest and capital payments on loans, dividends and
proceeds on disposal.

Rand Refinery provides precious metal smelting and refining services in South Africa. Harmony holds a 10.38% share in Rand Refinery. Although
the group holds less than 20% of the equity shares of Rand Refinery, the group is able to exercise significant influence by virtue of having a right to
appoint a director on the board. Through the 10% shareholding and the right to appoint a director on the board, the investment has been accounted
for as an associate.

Due to issues experienced at Rand Refinery following the implementation of a new Enterprise Resource Planning (ERP) system on 1 April 2013, a
discrepancy between the actual inventory and the accounting records was noted. Harmony provided for its estimated share of loss for the inventory
discrepancy and recognised a US$12.0 million loss in the 2014 financial year. This resulted in the investment being written down to US$nil during
the 2014 financial year.

The movement in the investment in associate during the year is as follows:

US dollar

Harmony has equity accounted for its share of the profits and losses based on Rand Refinery's most recent available management accounts.

F-37

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

INVESTMENTS IN ASSOCIATES continued

The results of Rand Refinery, and its aggregated assets (including goodwill) and liabilities are as follows as at 30 June 2015:

Figures in million

2015

2014

Non-current assets

Current assets

134

Other current assets (excluding cash and cash equivalents)

113

Cash and cash equivalents

196

Provision for estimated inventory discrepancy

(116)

Total assets

Non-current liabilities¹

Current liabilities

Total liabilities

111

Revenue

(Loss)/profit from continuing operations

(33)

Other comprehensive income

(1)

Total comprehensive income

(33)

Provision for estimated inventory discrepancy

(116)

Percentage interest held

10%

10%

¹ Includes the loans to shareholders.

Rand Refinery's year end is 30 September.

INVESTMENT IN JOINT OPERATIONS

MOROBE MINING JOINT VENTURES (MMJV) PARTNERSHIP AGREEMENT

INVENTORIES

ACCOUNTING POLICY

Figures in million

2015

2014

Gold in lock-up

Gold in-process, ore stockpiles and bullion on hand

Consumables at weighted average cost

Total inventories

109

150

Non-current portion of gold in lock-up and gold in-process

(3)

(5)

Total current portion of inventories

106

145

Included in the balance above is:
Inventory valued at net realisable value

Consumables are valued at weighted average cost value after appropriate allowances for slow moving and redundant items.

US dollar

Inventories, which include bullion on hand, gold-in-process, gold in lock-up, ore stockpiles and consumables, are measured at the lower of cost and net
realisable value. Net realisable value is assessed at each reporting date and is determined with reference to relevant market prices.

The cost of bullion, gold-in process and gold in lock-up is determined by reference to production cost, including amortisation and depreciation at the
relevant stage of production. Ore stockpiles are valued at average production cost. Stockpiles and gold in lock-up are classified as non-current assets
where the stockpile exceeds current processing capacity and where a portion of static gold in lock-up is expected to be recovered more than 12 months
after balance sheet date.

US dollar

The group has a 50% interest in mining and exploration assets located in the Morobe province, PNG. Newcrest Mining Limited (Newcrest) owns the
remaining 50% interest in these assets. The assets include the Hidden Valley mine and the Wafi-Golpu projects. This partnership was formed during the
2009 financial year through a range of transactions, which included Newcrest’s purchase of a 30.01% participating interest and a further farm-in of an
additional 19.99% participating interest in the assets. The total value of the transaction was estimated at US$530 million and was completed by 30 June
2009. The joint arrangement is accounted for as a joint operation.

Gold in-process inventories represent materials that are currently in the process of being converted to a saleable product. 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 or stockpile plus the in-process conversion costs,
including the applicable depreciation relating to the process facility, incurred to that point in the process. Gold in-process includes gold in lock-up which is
generally measured from the plants onwards. Gold in lock-up is expected to be extracted when plants are demolished at the end of their useful lives,
which is largely dependent on the estimated useful life of the operations feeding the plants. Where mechanised 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. At the group’s open pit operations, gold in-process represents production in broken ore form.

F-38

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

INVENTORIES continued

SHARE CAPITAL

ACCOUNTING POLICY

The cost of treasury shares is eliminated against the share capital balance.

Authorised

1 200 000 000 (2014: 1 200 000 000) ordinary shares of 50 SA cents each.

Issued

436 187 133 (2014: 435 825 447) ordinary shares of 50 SA cents each. All issued shares are fully paid.

Share issues

Treasury shares

Included in the total of issued shares is an amount of 335 shares held by Lydenburg Exploration Limited, a wholly owned subsidiary of the company.

OTHER RESERVES

Figures in million

2015

2014

Foreign exchange translation reserve (a)

(1 378)

(1 010)

Fair value movement of available-for-sale financial assets (b)

Equity component of convertible bond (c)

Acquisition of non-controlling interest in subsidiary (d)

(57)

(57)

Share-based payments (e)

175

159

Repurchase of equity interest (f)

(13)

(13)

Other (g)

(6)

(7)

Total other reserves

(1 238)

(887)

(a)

Figures in million

2015

2014

Balance at beginning of year

(1 010)

(804)

Current year's foreign exchange translation gain/(loss)

(368)

(206)

Balance at end of year

(1 378)

(1 010)

Shares issued in the 2015 and 2014 financial years relate to the exercise of share incentives by employees.

Ordinary 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.

Note 32 set out details in respect of the share option scheme and shares held in trust for the employees of the group.

During the 2015 financial year, a write-down of US$1.2 million (2014: US$0.7 million) was made for the net realisable value adjustment for gold in lock-
up.

During August 2012, 3.5 million shares were issued to the Tlhakanelo Employee Share Trust. As the trust is controlled by the group, the shares are
treated as treasury shares. During 2015, 670 859 (2014: 828 921) shares were exercised by employees and the remaining 1 062 672 shares are still
held as treasury shares.

During the year, an increase of US$4.7 million (2014: US$1.4 million) to the provision for slow moving and redundant stock was made. The increase in
2015 and 2014 in the provision was primarily the result of additional redundant stock items being identified in PNG and taken into account. The total
provision at 30 June 2015 was US$10.0 million (2014: US$6.4 million).

US dollar

The balance of the foreign exchange translation reserve movement represents the cumulative translation effect of the group's off-shore operations.
The US dollar amount includes the translation effect from rand to US dollar.

F-39

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

OTHER RESERVES continued

(b)

Figures in million

2015

2014

Balance at beginning of year

Fair value movement - unrealised

Fair value movement - realised portion reclassified to profit or loss

(1)

Balance at end of year

(c)

(d)

(e) Share-based payments

Figures in million

2015

2014

Balance at beginning of year

159

136

Share-based payments expensed

Balance at end of year

175

159

(f)

(g)

ACCOUNTING POLICY - PROVISIONS (APPLICABLE TO NOTES 25, 26 AND 27)

Provisions are recognised 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 recognised as a provision is the net present value of the best estimate of the expenditure required to settle the present obligation at balance
sheet date using a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The estimate
takes into account the associated risks and uncertainties. The increase in the provision due to the passage of time is recognised 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.

The balance of the fair value movement reserve represents the movement in the fair value of the available-for-sale financial assets. For details on
the movement, refer to note 18.

On 19 March 2010, Harmony Gold Mining Company Limited concluded an agreement with African Vanguard Resources (Proprietary) Limited
(AVRD), for the purchase of its 26% share of the mining titles of the Doornkop South Reef. The original sale of the 26% share in the mining titles
was accounted for as an in-substance call option by AVRD over the 26% mineral right. The agreement to purchase AVRD's 26% interest during the
2010 financial year is therefore considered to be a repurchase of the option (equity interest). The 26% interest was transferred from AVRD to
Harmony in exchange for Harmony repaying the AVRD Nedbank loan and the issue of 2 162 359 Harmony shares. The difference between the
value of the shares issued of US$20.5 million, the liability to the AVRD and transaction costs, have been taken directly to equity.

Included in the 2015 financial year is an actuarial gain of US$0.4 million (2014: actuarial loss of US$2.9 million), net of tax of US$0.2 million (2014:
US$0.7 million), on post-retirement benefits recognised in other comprehensive income (refer to note 26 for more details).

US dollar

The group issues equity-settled instruments to certain qualifying employees under an employee share option scheme and employee share
ownership plan (ESOP) to purchase shares in the company’s authorised but unissued ordinary shares. Equity share-based payments are measured
at the fair value of the equity instruments at the date of the grant. Share-based payments are expensed over the vesting period, based on the
group’s estimate of the shares that are expected to eventually vest. During the 2015 financial year, the equity-settled share-based payment expense
of US$16.4 million (2014: US$22.9 million) was charged to the income statement (refer to note 32 for more details).

US dollar

On 24 May 2004, the group issued a convertible bond. The amount representing the value of the equity conversion component is included in other
reserves, net of deferred income taxes. The equity conversion component is determined on the issue of the bonds and is not changed in
subsequent periods. The convertible bonds were repaid in 2009.

On 15 March 2004, Harmony announced that it had made an off-market cash offer to acquire all the ordinary shares, listed and unlisted options of
Abelle Limited, 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 interest acquired, amounting to US$57 million, has been accounted for under other reserves.

F-40

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

PROVISION FOR ENVIRONMENTAL REHABILITATION

ACCOUNTING POLICY

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The following is a reconciliation of the total liability for environmental rehabilitation:

Figures in million

2015

2014

Provision raised for future rehabilitation

Balance at beginning of year

198

200

Change in estimate - Balance sheet

Change in estimate - Income statement

(6)

(4)

Time value of money and inflation component of rehabilitation costs

Translation

(26)

(12)

Total provision for environmental rehabilitation

182

198

Figures in million

2015

2014

Future net undiscounted obligation

Ultimate estimated rehabilitation cost

237

283

Amounts invested in environmental trust funds (refer to note 17)

(192)

(213)

Total future net undiscounted obligation

US dollar

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the group has estimated that, based on current environmental
and regulatory requirements, the total undiscounted cost for the mines, in the current monetary terms, is approximately US$237.3 million (2014:
US$283.1 million).

Estimated long-term environmental obligations, comprising pollution control, rehabilitation and mine closure, are based on the group’s environmental
management plans in compliance with current technological, environmental and regulatory requirements.

Based on disturbances to date, the net present value of expected rehabilitation cost estimates is recognised 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 capitalised to mining assets against
an increase in the rehabilitation provision. If a decrease in the liability exceeds the carrying amount of the asset, the excess is recognised immediately in
the income statement. If the asset value is increased and there is an indication that the revised carrying value is not recoverable, impairment is
performed in accordance with the accounting policy dealing with impairments of non-financial assets. Rehabilitation projects undertaken, included in the
estimates are charged to the provision as incurred. The cost of 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 capitalised cost is depreciated over the life of the related asset.

Significant judgement is applied in estimating ultimate rehabilitation cost that will be required in future to rehabilitate the group’s mines. Ultimate cost may
significantly differ from current estimates.

For the South African operations, management used an inflation rate of 6.50% (2014: 6.50%) (2013: 6.00%) 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 dependent on the shaft’s life of mine and are as follows: for 12 months – 6.50% (2014: 6.75%) (2013: 5.30%); for one to five years –
7.30% (2014: 7.75%) (2013: 6.20%); for six to nine years – 7.80% (2014: 8.00%) (2013: 6.40%) and for ten years or more – 8.00% (2014: 8.25%) (2013:
7.25%). These estimates were based on recent yields determined on government bonds.

In calculating the rehabilitation liability in PNG for 2015, an inflation rate of 5.0% (2014: 2.9%) (2013: 2.5%) was used, together with a discount rate of
6.25% (2014: 6.25%) (2013: 6.80%).

The group’s mining and exploration activities are subject to extensive environmental laws and regulations. The group has made, and expects to make in
the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future
reclamation costs are based principally on legal and regulatory requirements.

The provision for environmental rehabilitation for PNG amounts to US$36.4 million (2014: US$32.2 million) and is unfunded.

The group intends to finance the ultimate rehabilitation costs from the money invested in environmental trust funds as well as the proceeds on sale of
assets and gold from plant clean-up at the time of mine closure. The group has guarantees in place, some cash-backed, relating to some of the
environmental liabilities. Refer to notes 16 and 34.

During 2014 and 2015, the group rehabilitated certain decommissioned operations in the Free State as part of its overall strategy of eliminating safety
and health exposures and reducing environmental liability. Following several years of working closely with the DMR to determine the best solution for
rehabilitating certain pits, Kalgold received a decision from the DMR during 2015 to use tailings to backfill pits that have been mined out and as a result
the deposition into these pits is in progress.

F-41

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

RETIREMENT BENEFIT OBLIGATION

ACCOUNTING POLICY

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

(a) Pension and provident funds

(b) Post-retirement benefits other than pensions

Through the post-employment medical plan, the group is exposed to a number of risks, the most significant of which are discussed below:

• Change in bond yields: A decrease in the bond yields will increase the plan liability.

• Inflation risk: The obligation is linked to inflation and higher inflation will lead to a higher liability.

The liability is unfunded and will be settled out of cash and cash equivalents when it becomes due. The liability is based on an actuarial valuation
conducted during the year ended 30 June 2015, using the projected unit credit method. The next actuarial valuation will be performed on 30 June 2016.

• Life expectancy: The obligation is to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the
plan’s liabilities.

The net actuarial gain for 2015 was mainly a result of exits of current employees being higher than expected (2014: net actuarial loss due to change in
medical scheme from Minemed to Bestmed).

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 at the present value of the estimated future cash
outflows using government bond interest rates consistent with the terms and risks of the obligation. Actuarial gains and losses as a result of these
valuations are recognised in other comprehensive income (OCI) at revaluation date. Actuarial gains and losses recognised in OCI will not be recycled to
profit or loss. The future liability for current and retired employees and their dependants is accrued in full based on actuarial valuations obtained annually.

The principal actuarial assumptions used to determine the present value of unfunded obligations are discussed above. In addition the
following was also considered:

• It is assumed that 90% of employed members will be married at retirement or earlier death and that wives are four years younger
than their husbands. It is assumed that the only dependants will be spouses.

An updated actuarial valuation is carried out at the end of each financial year. Assumptions used to determine the liability include a discount rate of 9%,
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)
(retirement age of 60 years) and a medical inflation rate of 7% (2014: discount rate of 10.5%, retirement age of 60 years and 8.6% inflation rate) (2013:
discount rate of 9.3%, retirement age of 60 years and 7.45% inflation rate).

Management determined the discount rate by assessing government bonds with similar terms to the liability. The changes to the discount rate and
medical inflation rate are similar to changes in interest and inflation rates in South Africa.

The group contributes to several pension and provident funds governed by the Pension Funds Act, 1956 for the employees of its South African
subsidiaries. The pension funds are multi-employer defined contribution industry plans. The group’s liability is therefore limited to its monthly determined
contributions.

The provident funds are funded on a “monetary accumulative basis” with the member’s and employer’s contributions having been fixed in the
constitution of the funds.

The Australian group companies make contributions to each employee’s superannuation (pension) funds in accordance with the Superannuation
Guarantee Scheme (SGS). The SGS is a Federal Government initiative enforced by law which compels employers to make regular payments to
regulated funds providing for each employee on their retirement. The SGS were set at a minimum of 9.50% of gross salary and wages for the 2015 year
(2014: 9.25%). The fund is a defined contribution plan.

The PNG Superannuation Act 2002 requires a compulsory employer contribution of 8.4% (2014: 8.4%) into an approved superannuation (pension) fund
if an employee is appointed for a period of three months or more. The approved superannuation funds are defined contribution plans.

Substantially all the group’s employees are covered by the above mentioned retirement benefit plans. Funds contributed by the group for the 2015
financial year amounted to US$43.0 million (2014: US$47.7 million).

Harmony inherited a post-retirement medical benefit obligation, which existed at the time of the Freegold acquisition in 2002. The group’s obligation in
this regard is to pay a subsidy of 2% for every completed year of employment up to a maximum of 50% of total medical aid contributions, commencing
on date of retirement. Should the employee die, either in service or after retirement, this benefit will transfer to his/her dependants. The medical aid tariffs
are based on the Bestmed medical scheme (Bestmed) options. Except for the pre-mentioned employees, Harmony has no other post-retirement
obligation for the other group employees.

• It is assumed that all Continuation and Widow Members (CAWMs) will remain on the current benefit option and income band. For employed
members, post-employment contributions were assumed to be equal to the average payable for the current CAWMs membership;

• It is assumed that not all employed members will remain employed until retirement therefore estimated resignation and ill-health
retirement rates are also taken into account;

F-42

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

RETIREMENT BENEFIT OBLIGATION continued

(b) Post-retirement benefits other than pensions continued

Figures in million

2015

2014

Present value of unfunded obligations

Current employees

Retired employees

Movement in the liability recognised in the balance sheet

Balance at beginning of year

Contributions paid

(1)

(1)

Other expenses included in staff costs/current service cost

Curtailments¹

(8)

Finance cost

Net actuarial (gain)/loss recognised during the year²

(1)

Translation

(1)

(1)

Balance at end of year

² The net actuarial (gain)/loss has been recorded in other comprehensive income.

Figures in million

2015

2014

The net liability of the defined benefit plan is as follows:

Present value of defined benefit obligation

Fair value of plan assets

Balance at end of year

The effect of a percentage point increase and decrease in the assumed medical cost trend rate is as follows:

Figures in million

2015

2014

Effect of a 1% increase on:
Aggregate of service cost and finance cost

Defined benefit obligation

Effect of a 1% decrease on:
Aggregate of service cost and finance cost

Defined benefit obligation

The group expects to contribute approximately US$0.7 million to the benefit plan in 2016.

The weighted average duration of the defined benefit obligation is 16.1 years.

ACCOUNTING POLICY - FINANCIAL LIABILITIES (APPLICABLE TO NOTES 27, 28 AND 29)

The group classifies financial liabilities as follows:

•    Borrowings are initially recognised at fair value net of transaction costs incurred and subsequently measured at amortised cost, comprising original
      debt less principal payments and amortisation, using the effective yield method. Any difference between proceeds (net of transaction cost) and the
      redemption value is recognised in the income statement over the period of the borrowing using the effective interest rate method.

  Fees paid on the establishment of the loan facilities are capitalised as a pre-payment and amortised over the period of the facility to which it relates,
  to the extent it is probable that some or all of the facility will be drawn down. To the extent there is no evidence that it is probable that some or all of
  the facility will be drawn down, the fee is expensed.

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 payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Payables are classified as current liabilities if payment is due within a year or less. If not, they are presented as non-current liabilities.

Financial liabilities 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 liabilities, with the exception of financial liabilities classified at fair value through profit or loss. The subsequent
measurement of financial liabilities is discussed below.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to
occur, and changes in some of the assumptions may be correlated. The analysis is performed on the same basis for 2014.

¹ The curtailment relates to the significant reduction in members qualifying for the post-retirement benefit, mainly arising from the change in the terms of employment of

members, resulting in a reduction of the liability of US$8.2 million.

US dollar

F-43

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

OTHER NON-CURRENT LIABILITIES

ACCOUNTING POLICY

Figures in million

2015

2014

Financial liabilities

Sibanye Beatrix ground swap royalty provision (a)

Non-financial liabilities

ESOP share-based payment liability (b)

Other (c)

Total

(a)

(b)

(c)

BORROWINGS

Westpac Bank

Nedbank Limited

In July 2007, Morobe Consolidated Goldfields entered into US dollar finance lease agreements with Westpac Bank for the purchase of mining fleet to be
used on the Hidden Valley project. There is no debt covenant clause in the agreements. The repayments on the finance lease from Westpac Bank were
completed in December 2013.

During 2014, Harmony and Sibanye entered into an agreement whereby the Joel mine exchanged two portions of its mining right for two portions of
Sibanye's Beatrix mine's mining right, as well as acquiring two additional portions from Beatrix (sale portions). The transaction was completed in May
2014. The purchase consideration of the sale portions acquired by Joel is payable as a royalty of 3% on gold revenue generated from these two
portions. The royalty liability recorded is the net present value of 3% of future gold revenue of the sale portions. During 2015, an amount of US$0.2
million was recorded relating to time value of money and US$0.3 million relating to changes in estimates. Refer to note 14(a) for further details on
the key assumptions for the calculation of the provision, which is based on the life-of-mine plan of Joel. Refer to note 6 for details on the profit
recognised.

The liability relates to the cash-settled share-based payment transaction following the award of ESOP share appreciation rights (SARs) to qualifying
employees through the Tlhakanelo Employee Share Trust. Refer to note 32 for more details.

Refer to the accounting policy on provisions above, accounting policies on financial liabilities below and note 32 for the accounting policy on share-based
payments.

Included in Other in the 2014 financial year is a provision of US$5.4 million relating to the pumping and treatment costs of fissure water in the
Klerksdorp, Orkney, Stilfontein and Hartbeesfontein (KOSH) Basin. This provision was raised following the High Court's dismissal of Harmony's
application to have a directive issued by the Department of Water Affairs (DWAF) in November 2005 set aside, as it relates to the Orkney
operations, which were sold in 2008. The appeal application heard in November 2013 was unsuccessful and Harmony has consequently entered
into separate negotiations with the claimants. During 2015, Harmony made a payment to Simmer and Jack Investments (Proprietary) Limited
amounting to US$2.3 million and a payment of US$2.8 million to AngloGold Ashanti Limited, the two claimants in the matter, as full and final
settlement.

US dollar

On 11 December 2009, the company entered into a loan facility with Nedbank Limited, comprising a term facility of R900 million (US$119.4 million) and a
revolving credit facility of R600 million (US$79.6 million). The facility was utilised to fund the acquisition of the Pamodzi Free State assets as well as the
group's major capital projects and working capital requirements. Interest accrued on a day-to-day basis over the term of the loan at a variable interest
rate. The outstanding amount on the term loan was settled in December 2013 by drawing against the new facility (discussed below).

On 30 November 2010, the company entered into an additional loan facility with Nedbank Limited, comprising a term facility of R500 million (US$70.1
million) and a revolving credit facility of R250 million (US$35.0 million). Interest terms are identical to the original facility. The repayment terms of the
original revolving credit facility were amended to coincide with the repayment on the new facility. The outstanding amount on the term loan was settled in
December 2013 by drawing against the new facility (discussed below).

On 20 December 2013, the company entered into a loan facility with Nedbank Limited, comprising a revolving credit facility of R1 300 million (US$125.6
million). Interest accrues on a day-to-day basis over the term of the loan at a variable interest rate. R467 million (US$45.4 million) was drawn down
during December 2013 to repay the outstanding amounts on the Nedbank term loans. The facility was repaid in March 2014. In January 2015, R400
million was drawn down.

F-44

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

BORROWINGS continued

US dollar revolving credit facilities

Terms and debt repayment schedule at 30 June 2015

Debt covenants

• The group's interest cover ratio shall not be less than five (EBITDA¹ /Total interest paid);

• Tangible Net Worth² to total net debt ratio shall not be less than six times or eight times when dividends are paid;

• Leverage³ shall not be more than 2.5 times.

¹ Earnings before interest, taxes, depreciation and amortisation (EBITDA) as defined in the agreement excludes unusual items such as impairment and restructuring cost.

² Tangible Net Worth is defined as total equity less intangible assets.

³ Leverage is defined as total net debt to EBITDA.

Repayable on maturity

6 February 2018

Cession and pledge of
operating subsidiaries'
shares

Nedbank Limited (secured
loan - rand revolving credit
facility)

1, 3 or 6 month JIBAR plus 3.5%,
payable at the elected interest
interval

3 or 6 month LIBOR plus 3%,
payable at the elected interest
interval

US dollar revolving credit
facility (secured loan)

Security

On 11 August 2011, the company entered into a loan facility which was jointly arranged by Nedbank Limited and FirstRand Bank Limited (acting through
its Rand Merchant Bank division) (syndicate), comprising a US$300 million syndicated revolving credit facility, of which only US$270 million was drawn
down. The facility was utilised to fund exploration projects in PNG. Interest at LIBOR plus 260 basis points was paid quarterly. The syndicated revolving
facility was settled in February 2015 by drawing against the new facility (discussed below).

On 22 December 2014, the company entered into a loan facility agreement which was jointly arranged by Nedbank Limited and Barclays Bank Plc,
comprising a revolving credit facility of up to US$250 million. All conditions precedent were met during February 2015 and US$205 million was drawn
down to repay the syndicated revolving credit facility, resulting in a net cash outflow of US$65 million. The remaining US$45 million was drawn down
during May 2015. Interest accrues on a day-to-day basis over the term of the loan at a variable interest rate.

Interest charge

Repayment terms

Repayment date

The debt covenant tests are performed on a quarterly basis. No breaches of the covenants were identified during the tests in the 2015 financial year.

The debt covenant tests for both the rand and US dollar revolving credit facilities were renegotiated during December 2014 and are as follows:

Repayable on maturity

23 December 2016

Cession and pledge of
operating subsidiaries'
shares

F-45

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

BORROWINGS continued

Interest-bearing borrowings

Figures in million

2015

2014

Non-current borrowings

Westpac Bank (secured finance lease)

Balance at beginning of year

Repayments

Net adjustments to current portion

Translation

Nedbank Limited (secured loan - term facilities)

Balance at beginning of year

Repayments

(44)

Amortisation of issue costs

Net adjustments to current portion

Translation

(2)

Nedbank Limited (secured loan - rand revolving credit facilities)

Balance at beginning of year

Draw down

Repayments

(44)

Issue cost

Amortisation of issue costs

Translation

(2)

(1)

Syndicated (secured loan - US$ revolving credit facility)

270

Balance at beginning of year

270

210

Draw down

Repayments

(270)

Issue cost

Net adjustments to current portion

(2)

Translation

US dollar revolving credit facility (secured loan)

247

Balance at beginning of year

Draw down

250

Issue cost

(4)

Amortisation of issue costs

Translation

Total non-current borrowings

280

270

Total interest-bearing borrowings

280

270

The maturity of borrowings is as follows:

Current

Between one to two years

270

Between two to five years

247

280

270

Undrawn committed borrowing facilities:

Expiring within one year

Expiring after one year

123

153

2015

2014

Westpac Bank

n/a

1.9

Nedbank Limited - rand revolving credit facility

9.7

8.7

US dollar revolving credit facility

3.0

2.8

Effective rate

US dollar

F-46

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

TRADE AND OTHER PAYABLES

ACCOUNTING POLICY

The group accrues for the cost of the leave days granted to employees during the period in which the leave days accumulate.

Figures in million

2015

2014

Financial liabilities

Trade payables

Other liabilities

Non-financial liabilities

Payroll accruals

Leave liabilities (a)

Shaft related accruals

Other accruals

ESOP share-based payment liability (b)

Value added tax

Total trade and other payables

137

174

(a) Leave liabilities

Figures in million

2015

2014

Balance at beginning of year

Benefits paid

(33)

(34)

Total expense per income statement

Translation

(4)

(1)

Balance at end of year

(b) ESOP share-based payment liability

The liability relates to the cash-settled share-based payment transaction following the award of ESOP SARs to qualifying employees through the
Tlhakanelo Employee Share Trust. Refer to note 32 for more details.

Employee entitlements to annual leave are recognised on an ongoing basis. An accrual is made for the estimated liability for annual leave as a result of
services rendered by employees up to the balance sheet date. The movement in the liability recognised in the balance sheet is as follows:

US dollar

F-47

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

CASH GENERATED BY OPERATIONS

Figures in million

2015

2014

2013

All amounts disclosed include discontinued operations where relevant

Reconciliation of loss before taxation to cash generated by operations:

Loss before taxation

(436)

(145)

(147)

Adjustments for:
Amortisation and depreciation

216

207

227

Impairment of assets

285

135

274

Share-based payments

Net decrease in provision for post-retirement benefits

(8)

(1)

Net decrease in provision for environmental rehabilitation

(6)

(4)

(9)

Profit on sale of property, plant and equipment

(1)

(3)

(16)

Loss on scrapping of property, plant and equipment

Loss from associates

Profit on disposal/(impairment) of investments

(1)

Net gain on financial instruments

(1)

(16)

(22)

Profit on sale of subsidiary

(11)

Interest received

(20)

(21)

(22)

Finance cost

Inventory adjustments

(9)

(21)

Foreign exchange translation difference

Provision for bad debts

Exploration (amortisation and depreciation)

Other non-cash adjustments

Effect of changes in operating working capital items
Receivables

Inventories

(4)

(24)

Payables

(14)

(24)

Cash generated by operations

168

218

394

ADDITIONAL CASH FLOW INFORMATION

(i) The income and mining taxes paid in the statement of cash flow represents actual cash paid less refunds received.

(ii)

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015

(a) Principal non-cash transactions

Share-based payments (refer to note 32).

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014

(a) Acquisitions and disposal of investments/businesses

(i) Profit on sale of property, plant and equipment

(ii) Investments in financial assets

Refer to note 18(a) for details on the disposal of the Wits Gold investment.

(b) Principal non-cash transactions

Share-based payments (refer to note 32).
Joel/Sibanye ground swap (refer to note 27).

US dollar

At 30 June 2015, US$74.0 million (2014: US$152.6 million) of borrowing facilities had not been drawn down and is therefore available for future operating activities
and future capital commitments. Refer to note 28.

During May 2014, the ground swap between Joel mine and Sibanye's Beatrix mine was completed, resulting in a non-cash profit being recognised for the difference
between the carrying value of the Joel portion and the fair value of the Beatrix portion.

F-48

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

CASH GENERATED BY OPERATIONS continued

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013

(a) Acquisitions and disposal of investments/businesses

Disposal of Evander

Figures in million

2015

2014

2013

Property, plant and equipment

141

Funds set aside for environmental rehabilitation

Inventories

Trade and other receivables

Cash and cash equivalents

Profit on disposal

Environmental liability

(20)

Retirement benefit obligation and other provisions

Trade and other payables

(10)

Deferred tax liability

(18)

Purchase consideration

144

Cash and cash equivalents

(3)

Translation

(2)

Total proceeds received in cash

139

(b) Principal non-cash transactions

Share-based payments (refer to note 32).

US dollar

The conditions precedent for the sale of Evander Gold Mine Limited were fulfilled and the transaction was completed on 28 February 2013. The purchase consideration
of R1.5 billion (US$170.0 million) was adjusted for distribution received prior to the effective date of US$23.4 million. Refer to note 12.

F-49

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

EMPLOYEE BENEFITS

ACCOUNTING POLICY

2015

2014

Number of permanent employees as at 30 June:

South African operations

26 000

28 991

International operations¹

1 465

1 593

Total number of permanent employees

27 465

30 584

Figures in million

2015

2014

Aggregate earnings

The aggregate earnings of employees including directors were:

Salaries and wages and other benefits

592

633

Retirement benefit costs

Medical aid contributions

Total aggregated earnings²

651

698

² These amounts have been included in cost of sales, corporate expenditure and capital expenditure.

During the 2015 financial year US$25.2 million (2014: US$26.1 million) was included in the payroll costs for termination costs. Termination costs
include the cost relating to the voluntary retrenchment and restructuring process as well as retrenchments due to shaft closures (refer to note 5).

•

Pension, provident and medical benefit plans are funded through annual contributions. The group pays fixed contributions into a separate entity
in terms of the defined contribution pension, provident and medical plans which are charged to the income statement in the year to which they
relate. The group's liability is limited to its monthly determined contributions and it has no further liability, legal or constructive, if the fund does not
hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Refer to note 26 for details of
the post-retirement medical benefit plan.

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary
redundancy in exchange for these benefits. The group recognises termination benefits at the earlier of the following dates: (a) when the group can
no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and
involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are
measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after balance sheet date are
discounted to present value.

US dollar

¹ The total number of employees in Australia, including the Brisbane office, at 30 June 2015 was 75 (2014: 59). The total for the international operations includes the MMJV

employees.

F-50

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SHARE-BASED PAYMENTS

EMPLOYEE SHARE-BASED PAYMENTS

The total cost relating to employee share-based payments is made up as follows:

Figures in million

2015

2014

2012 employee share ownership plan (a)

2006 share plan (b)

Total employee share-based payments included in cost of sales

The 2003 scheme expired during 2015. There was no cost for the 2014 and 2015 years. Refer to (c) below for detail on the scheme.

(a) 2012 employee share ownership plan

The scheme shares are accounted for as equity-settled.

The total cost relating to the 2012 ESOP is made up as follows:

Figures in million

2015

2014

2012 employee share ownership plan
Equity-settled

Cash-settled

Subsequent to the annual general meeting held on 1 December 2010, 1 039 794 ordinary shares have been issued in terms of the 2003 scheme and
35 902 437 share option awards have been granted in terms of the 2006 share plan. The Tlhakanelo Employee Share Trust is authorised to allocate
12 864 000 ordinary shares to the employee share ownership plan.

ACCOUNTING POLICY

The group operates the following employee share incentive plans:

• Equity-settled share-based payments plan where the group grants share options to certain employees in exchange for services received;
• Equity-settled and cash-settled employee share ownership plan.

Equity-settled share-based payments are measured at fair value that includes market performance conditions but excludes the impact of any service
and non-market performance conditions of the equity instruments at the date of the grant. The share-based payments are expensed over the vesting
period, based on the group's estimate of the shares that are expected to eventually vest. The group used an appropriate option pricing model in
determining the fair value of the options granted. Non-market vesting conditions are included in assumptions about the number of options that are
expected to vest. At each balance sheet date, the estimates of the number of options that are expected to become exercisable are revised. The impact
of the revision of original estimates, if any, is recognised 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.

Cash-settled share-based payments are measured at fair value. The liability is remeasured at each balance sheet date until the date of settlement.

US dollar

The directors are authorised to issue up to 60 011 669 ordinary shares to participants who have received awards in accordance with Harmony's
employee share incentive schemes.

The group has the 2012 employee share ownership plan (ESOP) and the 2006 share plan that are active. The objective of these schemes is to
recognise the contributions of employees to the group's financial position and performance and to retain key employees.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The fair value of options granted is being determined using either a binomial, Black-Scholes or a Monte Carlo valuation model. The significant inputs into
the model are: vesting period, risk free interest rate, volatility, price on date of grant and dividend yield.

During August 2012, Harmony issued the first awards under its ESOP. The ESOP is overseen by the Tlhakanelo Employee Share Trust. In terms of the
ESOP rules, qualifying employees are offered one scheme share for every two share appreciation rights (SARs).

On the fifth anniversary of the first allocation date, any unallocated scheme shares and SARs will be distributed to all employees who participated in the
ESOP and who are still employed with the company pro rata in accordance with the number of scheme shares previously allocated to the employees.

The SARs incorporate a cash bonus with a minimum pay-out guarantee of R18 and a maximum pay-out ceiling of R32 per SAR over the vesting period.
The SARs include an equity-settled portion as well as a cash-settled portion related to the cash bonus. The cash-settled portion has been recognised as
a liability in the balance sheet (refer to note 27 and 29), the fair value of which will be remeasured at each reporting date.

US dollar

F-51

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SHARE-BASED PAYMENTS continued

EMPLOYEE SHARE-BASED PAYMENTS continued

(a) 2012 employee share ownership plan continued

Activity on awards

Activity on awards outstanding

Number of

awards

Number of

awards

Weighted

average

award price

For the year ended 30 June 2015
Balance at beginning of year

1 699 748

3 399 496

77.65

Awards granted

46 760

93 520

20.47

Awards exercised

(651 442)

(1 302 884)

77.95

Awards forfeited

(43 034)

(86 068)

73.06

Balance at end of year

1 052 032

2 104 064

75.11

For the year ended 30 June 2014
Balance at beginning of year

2 492 868

4 985 736

79.08

Awards granted

62 930

125 860

40.32

Awards exercised

(805 654)

(1 611 308)

79.24

Awards forfeited

(50 396)

(100 792)

76.50

Balance at end of year

1 699 748

3 399 496

77.65

List of awards granted but not yet exercised (listed by grant date)

Number of

awards

Award price

(SA rand)

Remaining

life (years)

As at 30 June 2015
Scheme shares
8 August 2012 allocation

927 232

n/a

1.7

8 March 2013 allocation

42 600

n/a

1.7

15 March 2014 allocation

36 520

n/a

1.7

15 March 2015 allocation

45 680

n/a

1.7

1 052 032

Share appreciation rights
8 August 2012 allocation

1 854 464

80.03

1.7

8 March 2013 allocation

85 200

56.35

1.7

15 March 2014 allocation

73 040

40.32

1.7

15 March 2015 allocation

91 360

31.01

1.7

2 104 064

Total awards granted but not yet exercised

3 156 096

Figures in million

2015

2014

Gain realised by participants on awards traded during the year

Fair value of awards exercised during the year

Scheme

SARs

US dollar

F-52

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SHARE-BASED PAYMENTS continued

EMPLOYEE SHARE-BASED PAYMENTS continued

(a) 2012 employee share ownership plan continued

Measurement

(i) Assumptions applied at grant date for awards granted during the year

Scheme

shares

SARs

Price at date of grant (SA rand per share):
15 March 2014 allocation

40.32

15 March 2015 allocation

20.47

Risk-free interest rate:
15 March 2014 allocation

n/a

6.90%

15 March 2015 allocation

n/a

6.53%

Expected volatility: *
15 March 2014 allocation

n/a

34.94%

15 March 2015 allocation

n/a

52.62%

Expected dividend yield:
for all allocations

n/a

1.00%

Minimum payout guarantee (SA rand per SAR):
for all allocations

n/a

Vesting period (from grant date):
15 March 2014 allocation

3 years

15 March 2015 allocation

2 years

(ii) Fair values used as a basis to recognise share-based cost

Scheme

shares

SARs

Minimum

payout

guarantee

15 March 2014 allocation

39.82

2.09

17.11

15 March 2015 allocation

19.97

0.50

16.61

(iii) Cash-settled liability

Figures in million

2015

2014

Cash-settled liability

Non-current

Current

Total cash-settled liability

Movement in the cash-settled liability recognised in the balance sheet:

Balance at beginning of year

IFRS 2 share-based payment charge for the year

Awards paid

(2)

(3)

Translation

(1)

Balance at end of year

18.00 to

32.00

* The volatility is measured as an annualised standard deviation of historical share price returns, using an exponentially weighted moving average (EWMA) model, with a

lambda of 0.99. The volatility is calculated on the grant date, and takes into account the previous three years of historical data.

SA rand per award

US dollar

The fair value of equity instruments granted during the year was valued using the Cox-Ross-Rubinstein binomial tree on the equity-settled portion of the
SARs. The minimum payout guarantee is valued at net present value and the spot share price on grant date was used for the scheme shares.

F-53

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SHARE-BASED PAYMENTS continued

EMPLOYEE SHARE-BASED PAYMENTS continued

(b) Options granted under the 2006 share plan

The 2006 share plan consists of share appreciation rights (SARs), performance shares (PS) and restricted shares (RS).
The share plan is equity-settled.

Award

Vesting

Performance criteria

SARs

The participant is still employed within the group.

Termination of employees' participation in the share plan is based on "no fault" and "fault" definitions.

• Fault

All unvested and unexercised SARs and all PS and RS not yet vested are lapsed and cancelled.

• No fault

Accelerated vesting occurs and all unvested and unexercised share options are settled in accordance with the rules of the plan.

Activity on share options

Activity on options and rights granted but not yet exercised

Number of

options and

rights

Weighted

average

option price

(SA rand)

Number of

rights

Number of

rights

For the year ended 30 June 2015
Balance at beginning of year

12 222 725

54.85

9 123 758

629 056

Options granted

6 998 079

18.46

7 255 423

83 000

Options exercised

(137 276)

20.41

(336 931)

(29 350)

Options forfeited and lapsed

(2 663 561)

59.55

(1 719 742)

(9 604)

Balance at end of year

16 419 967

38.86

14 322 508

673 102

For the year ended 30 June 2014
Balance at beginning of year

7 244 801

78.72

4 034 298

668 273

Options granted

7 031 605

34.38

6 814 713

155 780

Options exercised

(102 027)

33.18

(352 714)

(185 192)

Options forfeited and lapsed

(1 951 654)

70.85

(1 372 539)

(9 805)

Balance at end of year

12 222 725

54.85

9 123 758

629 056

Options and rights vested but not exercised at year end

2015

2014

2015

2014

2015

2014

Options and rights vested bot not exercised

1 884 175

2 117 574

Weighted average option price (SA rand)

82.29

78.40

n/a

n/a

n/a

n/a

The PS will vest after three years from the grant date, if and to the extent that
the performance conditions have been satisfied.

2014 allocation:

• the number of the rights awarded are linked to the

group's performance in comparison to the South African
Gold Index.

2011 to 2013 allocation:

• 50% (senior management) or 70% (management) of the

number of the rights awarded are linked to the annual gold
production of the group in relation to the targets set
annually.

• 50% (senior management) or 30% (management) of the

number of the rights awarded are linked to the group's
performance in comparison to the South African Gold
Index.

The RS will vest after three years from grant date.

SARs

SARs will vest in equal thirds in year three, four and five, subject to the
performance conditions having been satisfied.

The SARs will have an expiry date of six years from the grant date and the
offer price equals the closing market prices of the underlying shares on the
trading date immediately preceding the grant.

The group's headline earnings per share must have grown
since the allocation date by more than the South African
Consumer Price Index (CPI).

F-54

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SHARE-BASED PAYMENTS continued

EMPLOYEE SHARE-BASED PAYMENTS continued

(b) Options granted under the 2006 share plan continued

List of options and rights granted but not yet exercised (listed by grant date)

Number of

options and

rights

Award price

(SA rand)

Remaining

life (years)

As at 30 June 2015
Share appreciation rights
16 November 2009

1 223 601

77.28

0.4

15 November 2010

655 746

84.81

1.4

15 November 2011

670 229

104.79

2.4

16 November 2012

1 602 170

68.84

3.4

15 November 2013

5 524 192

33.18

4.4

17 November 2014

6 744 029

18.41

5.4

16 419 967

Performance shares
27 September 2012

6 160

n/a

0.2

16 November 2012

1 672 128

n/a

0.4

15 November 2013

5 562 559

n/a

1.4

17 November 2014

7 081 661

n/a

2.4

14 322 508

Restricted shares
15 November 2010¹

127 766

n/a

1.4

15 November 2011¹

87 000

n/a

2.4

27 September 2012

30 802

n/a

0.2

16 November 2012

216 768

n/a

0.4

15 November 2013¹

127 766

n/a

1.4

17 November 2014¹

83 000

n/a

2.4

673 102

Total options and rights granted but not yet exercised

31 415 577

Figures in million

2015

2014

Gain realised by participants on options and rights traded during the year

Fair value of options and rights exercised during the year

Measurement

(i) Assumptions applied at grant date for awards granted during the year

SARs

Performance

shares

Restricted

shares

Price at date of grant (SA rand per share):
15 November 2013 allocation

32.90

n/a

32.90

17 November 2014 allocation

17.95

n/a

17.95

Risk-free interest rate:
15 November 2013 allocation

7.34%

6.80%

n/a

17 November 2014 allocation

7.21%

7.44%

n/a

Expected volatility: *
15 November 2013 allocation

36.49%

51.25%

n/a

17 November 2014 allocation

44.39%

53.81%

n/a

Expected dividend yield:
15 November 2013 allocation

1.50%

0.00%

17 November 2014 allocation

1.00%

0.00%

Vesting period (from grant date)
for all allocations

5 years

3 years

In all cases, valuation date is the same as the allocation date, except for the 17 November 2014 allocation of performance shares with a valuation date
of 2 June 2015.

* The volatility is measured as an annualised standard deviation of historical share price returns, using an exponentially weighted moving average (EWMA) model, with a

lambda of 0.99. The volatility is calculated on the grant date, and takes into account the previous three years of historical data.

¹ The 2010 and 2011 restricted shares vested in November 2013 and November 2014 respectively. Restricted shares that were not exercised, partially or fully, at that time

remain restricted for a further three years, but were supplemented by a matching grant of restricted shares. All restricted shares are then only settled after the end of a further
three year period.

US dollar

The fair value of equity instruments granted during the year was valued using the Monte Carlo simulation on the market-linked PS, Cox-Ross-Rubinstein
binomial tree on the SARs and spot share price on grant date for the RS.

F-55

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SHARE-BASED PAYMENTS continued

EMPLOYEE SHARE-BASED PAYMENTS continued

(b) Options granted under the 2006 share plan continued

Measurement continued

(ii) Fair values used as a basis to recognise share-based cost

SARs

Performance

shares

Restricted

shares

17 November 2014 allocation

7.86

11.19

17.95

15 November 2013 allocation

12.44

31.50

32.90

(c) Options granted under the 2003 scheme

Following the introduction of the 2006 share plan, no further options were granted for the 2003 options scheme and all options are vested.

Activity on share options

Activity on share options granted but not yet exercised

Number of

options

Weighted

average

option price

(SA rand)

Number of

options

Weighted

average

option price

(SA rand)

For the year ended 30 June
Balance at beginning of year

614 476

44.76

745 346

45.97

Options forfeited and lapsed

(614 476)

44.76

(130 870)

51.65

Balance at end of year

614 476

44.76

OTHER SHARE-BASED PAYMENTS

Measurement

The following assumptions were applied at grant date:

2013

Business value (R'million)

450

Exercise price (R'million)

Risk-free interest rate

6.08%

Expected volatility*

37.33%

Expected dividend yield

8.04%

Vesting period (from grant date)

0 years

Equity value attributable to the BEE partners

25.00%

Expected redemption date

31 December 2020

* The volatility was measured in relation to a comparable listed company's share price volatility.

On 20 March 2013, Harmony signed transaction and funding agreements to give effect to an empowerment transaction to dispose of 30% of its Free
State based Phoenix operation (Phoenix) to BEE shareholders, which includes a free-carry allocation of 5% to a community trust that has been created
and is currently controlled by Harmony. The transaction closed on 25 June 2013, following the fulfilment of the last condition precedent. In terms of the
agreements Phoenix was transferred to a newly incorporated subsidiary (PhoenixCo).

The awards to the BEE partners have been accounted for as in-substance options as the BEE partners will only share in the upside, and not the
downside of their equity interest in PhoenixCo until the date the financing provided by Harmony is fully repaid. On this date the options will be exercised.
The award of the options to the BEE partners is accounted for by the group as an equity-settled share-based payment arrangement. The in-substance
options carry no vesting conditions and the fair value of the options of R23 million (US$2.3 million) was expensed on the grant date, 25 June 2013.

A subscription price paid by the BEE shareholders of R2 million was received and was recorded in other reserves as an option premium.

The share-based cost was calculated using the Monte Carlo simulation. The fair value of the option is the difference between the expected future
enterprise value of PhoenixCo and the expected loan balances at redemption date, and the present value of the trickle dividend determined in
accordance with the cash flow waterfall per the signed transaction and funding arrangements.

2015

2014

A fifth of the options granted under the 2003 scheme are exercisable annually from the grant date with an expiry date of 10 years from the grant date.
The offer price of these options equalled the closing market price of the underlying shares on the trading date immediately preceding the granting of
options. The options are equity-settled.

On resignation and retirement, share options which have vested may be taken up at the employee's election before the last day of service. On death,
the deceased estate has a period of twelve months to exercise these options.

SA rand per award

F-56

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

RELATED PARTIES

The following directors and prescribed officers own shares in Harmony at year-end:

Name of director/prescribed officer

2015

2014*

André Wilkens

101 303

101 303

Frank Abbott^{1 2}

203 243

139 500

Graham Briggs¹

24 718

14 347

Harry "Mashego" Mashego¹

3 096

Ken Dicks

20 000

20 000

Alwyn Pretorius¹

7 987

Johannes van Heerden¹

28 184

6 500

¹ The movement during the year relates to performance shares vested and retained.

² Purchased 60 000 shares on 28 May 2015 in the open market.

* 2014 only includes shares purchased. Performance shares vested and retained are excluded.

Refer to note 35 for transactions that took place after year end.

All the production of the group’s South African operations is sent to Rand Refinery in which Harmony holds a 10.38% interest. Refer to note 20.

During the 2013 financial year, Harmony sold its 100% interest in Evander. Refer to note 12.

Figures in million

2015

2014

Sales and services rendered to related parties
Joint operations

Associates¹

Total

Purchases and services acquired from related parties
Associates

Outstanding balances due by related parties
Associates¹

Joint operations

Total

¹ Refer to note 19 for details relating to the loan to associate.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND GUARANTEES

Figures in million

2015

2014

Capital expenditure commitments

Contracts for capital expenditure

Share of joint venture's contract for capital expenditure

Authorised by the directors but not contracted for

Total capital commitments

US dollar

African Rainbow Minerals Limited (ARM) currently holds 14.6% of Harmony’s shares. Patrice Motsepe, André Wilkens, Joaquim Chissano and Frank
Abbott, who are directors of Harmony, are also directors of ARM.

The outstanding balances from the related parties are not secured. Refer to note 19 for detail on the items relating to the loans to associates and
provisions raised against these loans as well as the terms and conditions that apply.

None of the directors or major shareholders of Harmony or, to the knowledge of Harmony, their families, had an interest, directly or indirectly, in any
transaction from 1 July 2012 or in any proposed transaction that has affected or will materially affect Harmony or its subsidiaries, other than as stated
below.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the group,
directly or indirectly, including any director (whether executive or otherwise) of the group.

Number of shares

US dollar

During 2014, the executive directors received remuneration of US$2.1 million, comprising of US$1.6 million for salaries, US$0.03 million for retirement
contributions, US$0.4 million for bonuses and US$0.1 million from the exercising of share options. The non-executive directors received US$0.7 million
in directors’ fees. The aggregate of remuneration received by executive management was US$5.0 million (including share options exercised).

During 2015, the executive directors received remuneration of US$1.9 million, comprising of US$1.5 million for salaries, US$0.03 million for retirement
contributions, US$0.3 million for bonuses and US$0.04 million from the exercising of share options. The non-executive directors received US$0.7 million
in directors’ fees. The aggregate of remuneration received by executive management was US$3.0 million (including share options exercised).

F-57

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

COMMITMENTS AND CONTINGENCIES continued

COMMITMENTS AND GUARANTEES continued

Figures in million

2015

2014

Within one year

Between one year and five years

Total commitments for operating leases

Figures in million

2015

2014

Guarantees¹

Guarantees and suretyships

Environmental guarantees²

Total guarantees

CONTINGENT LIABILITIES

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The following contingent liabilities have been identified:

(a)

(b)

Similar applications were also brought against various other gold mining companies for similar relief during August 2012.

¹ Guarantees and suretyships of US$1.0 million and environmental guarantees of US$3.3 million relating to the Evander group, which are in the process of being replaced by

Pan African or cancelled, have been excluded.

² At 30 June 2015, US$3.8 million (2014: US$3.1 million) has been pledged as collateral for environmental guarantees in favour of certain financial institutions. Refer to note 16.

US dollar

Contractual obligations in respect of mineral tenement leases amount to US$57.2 million (2014: US$58.3 million). This includes US$57.1 million (2014:
US$58.2 million) for the MMJV.

Contingencies will only realise when one or more future events occur or fail to occur. The exercise of significant judgement and estimates of the outcome
of future events are required during the assessment of the impact of such contingencies.

Litigation and other judicial proceedings as a rule raise difficult and complex legal issues and are subject to uncertainties and complexities including, but
not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which the suit is brought and differences in
applicable law. Upon resolution of any pending legal matter, the group may be forced to incur charges in excess of the presently established provisions
and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially affected by
the outcome of the litigation.

On 18 April 2008, Harmony Gold Mining Company Limited was made aware that it had been named as a defendant in a lawsuit filed in the US
District Court in the Southern District of New York on behalf of certain purchasers and sellers of Harmony’s American Depositary Receipts (ADRs)
and options with regards to certain of its business practices. Harmony retained legal counsel.

The company reached a mutually acceptable settlement with the plaintiff class and this settlement was found to be fair and reasonable and was
approved by the United States District Court in November 2011. A single class member filed an appeal of the District Court’s order approving the
settlement. That appeal resulted in the United States Court of Appeals for the Second Circuit affirming the decision of the District Court on more than
one occasion. The objecting plaintiff requested that the United States Supreme Court review the decision of the Second Circuit. Following the denial
of the request for review of the case by the Supreme Court in May 2014, the case has been concluded. The distribution of the settlement amount,
held in escrow, to the plaintiff class of the lawsuit filed in the United States of America was completed during the 2015 financial year. From both legal
and accounting perspectives, the matter is now concluded.

On 3 March 2011, judgement was handed down in the Constitutional Court, in the case of Mr Thembekile Mankayi v AngloGold Ashanti Limited
regarding litigation in terms of the Occupational Diseases in Mines and Works Act (ODIMWA). The judgement allows claimants, such as Mr
Mankayi, to institute action against their current and former employers for damages suffered as a result of them contracting occupational diseases
which result from their exposure to harmful quantities of dust whilst they were employed at a controlled mine as referred to in ODIMWA. In this
regard, should anyone bring similar claims against Harmony in future, those claimants would need to prove that silicosis, as an example, was
contracted whilst in the employ of the company and that it was contracted due to negligence on the company’s part to provide a safe and healthy
working environment. The link between the cause (negligence by the company in exposing the claimant to harmful quantities of dust whilst in its
employ) and the effect (the silicosis) will be an essential part of any case.

On 23 August 2012, Harmony and certain of its subsidiaries (Harmony group) were served with court papers in terms of which three former
employees made application to the South Gauteng High Court to certify a class for purposes of instituting a class action against the Harmony group.
In essence, the applicants want the court to declare them as suitable members to represent a class of current and former mineworkers for purposes
of instituting a class action for certain relief and to obtain directions from the court as to what procedure to follow in pursuing the relief required
against the Harmony group.

On 8 January 2013, the Harmony group, alongside other gold mining companies operating in South Africa (collectively the respondents), was served
with another application to certify two classes of persons representing a class of current and former mine workers who work or have worked on gold
mines owned and/or controlled by the respondents and who allegedly contracted silicosis and/or other occupational lung diseases, and another
class of dependents of mine workers who have died of silicosis and who worked on gold mines owned and/or controlled by the respondents. The
Harmony group opposed both applications and instructed its attorneys to defend the application.

F-58

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

COMMITMENTS AND CONTINGENCIES continued

CONTINGENT LIABILITIES continued

(c)

(d)

(e)

(f)

(g)

(h)

On 1 December 2008, Harmony issued 3 364 675 Harmony shares to Rio Tinto Limited (Rio Tinto) for the purchase of Rio Tinto’s rights to the
royalty agreement entered into prior to our acquisition of the Wafi deposits in PNG. The shares were valued at US$23 million on the transaction
date. An additional US$10 million in cash will be payable when the decision to mine is made. Of this amount, Harmony is responsible for paying the
first US$6 million, with the balance of US$4 million being borne equally by the joint operators.

The group may have a potential exposure to rehabilitate groundwater and radiation that may exist where the group has and/or continues to operate.
The group has initiated analytical assessments to identify, quantify and mitigate impacts if and when (or as and where) they arise. Numerous
scientific, technical and legal studies are underway to assist in determining the magnitude of the contamination and to find sustainable remediation
solutions. The group has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation
(MNA) by the existing environment will contribute to improvement in some instances. The ultimate outcome of the matter cannot presently be
determined and no provision for any liability that may result has been made in the financial statements. Should the group determine that any part of
these contingencies require them being recorded and accounted for as liabilities, that is where they become estimable and probable, it could have
material impact on the financial statements of the group.

At 30 June 2015, the group was in the process of implementing water treatment facilities at Doornkop and at Kusasalethu. These treatment facilities
will reduce our dependency on Rand Water and allow the mines to supply their own water.

In terms of Free State operations, Harmony has taken the initiative to develop a comprehensive regional closure plan which based on scientific
studies will determine any further exposure.

Due to the interconnected nature of mining operations in South Africa, any proposed solution for potential flooding and potential decant risk posed by
deep groundwater needs to be a combined one, supported by all the mines located in these goldfields. As a result, the Department of Mineral
Resource and affected mining companies are involved in the development of a regional mine closure strategy. Harmony operations have conducted
a number of specialist studies and the risk of surface decant due to rising groundwater levels has been obviated at the entire Free State region and
Kalgold. Therefore there is no contingency arising from these operations. Additional studies have been commissioned at Doornkop and
Kusasalethu. In view of the limitation of current information for accurate estimation of a liability, no reliable estimate can be made for these
operations.

The individual Harmony mining operations have applied for the respective National Water Act, Section 21 Water Use Licenses (WUL) to the
Department of Water and Sanitation (DWS). As part of the Water Use License Application (WULA) process for the respective operations, Harmony
has requested certain exemptions (relevant to the respective mining operations) from GNR 704 of 4 June 1999, “Regulations on the use of water for
mining and related activities aimed at the protection of water resources”. The respective WULA’s have subsequently not yet been approved by
DWS. The WUL conditions for the respective operations are subsequently not yet known and the subsequent potential water resource impact
liability as part of the mine rehabilitation and closure process (to which DWS is an important participant and decision maker) is uncertain.

In terms of the sale agreements entered into with Rand Uranium, Harmony retained financial exposure relating to environmental disturbances and
degradation caused by it before the effective date, in excess of US$6.2 million of potential claims. Rand Uranium is therefore liable for all claims up
to US$6.2 million and retains legal liability. The likelihood of potential claims cannot be determined presently and no provision for any liability has
been made in the financial statements.

Legal proceedings commenced in December 2010 against the Hidden Valley mine in PNG over alleged damage to the Watut River (which runs
adjacent to the Hidden Valley mine), alleged to have been caused by waste rock and overburden run-off from the mine. The damages sought by the
plaintiffs were not specified. The defendants intend to defend the claims. No active steps have been taken by the plaintiffs in this proceeding for
more than two years. It is not practicable to make any reasonable assessment of the prospects of the plaintiffs succeeding should they proceed with
these claims, nor the potential liability of the defendants if the plaintiffs were to succeed. As a result, no provision has been recognised in the
financial statements for this matter.

Following receipt of the aforesaid application, the Harmony group was advised that there was a potential overlap between the application of 23
August 2012 and the application of 8 January 2013. After deliberation between the respondents’ attorneys and the applicants’ attorneys, it was
resolved that the applicants’ attorneys will consolidate the two applications, together with three other similar applications. The applicants' attorneys
delivered an amended application for consideration by the respondents. On 17 October 2013, the five certification applications were consolidated by
order of court. It was agreed between the parties that the respondents have until 30 May 2014 to answer the allegations made in the consolidated
class certification application, and to state reasons why a class or classes should not be certified.

On 30 May 2014, the Harmony group served its answering affidavit to the consolidated class certification application. On 15 September 2014, the
applicants’ attorneys delivered their replying affidavit to the answering affidavit. The applicants’ attorneys have also joined further applicants to the
present proceedings and amended the relief sought against the gold mining companies on a number of occasions.

On 12 December 2014, the Treatment Action Campaign and Sonke Gender Justice (both non-profit organisations) (applicants) brought a formal
application to the consolidated class certification application to be admitted as amici curiae (i.e. friends of the court). On 28 August 2015, the
applicants were admitted as amici curiae. However, at the certification application enrolled for hearing between 12 October 2015 and 23 October
2015, they may only present legal submissions as to whether a certification of a class action should be granted or not.

On 3 May 2013, Harmony and one of its subsidiaries received a summons from Richard Spoor Attorneys on behalf of an employee. The plaintiff is
claiming US$2.1 million in damages plus interest from Harmony and one of its subsidiaries, and another gold mining group of companies. The
plaintiff alleges to have contracted silicosis with progressive massive fibrosis during the course of his employment. At this stage, and in the absence
of a court decision on this matter, it is not yet certain as to whether the company will incur any costs (except legal fees) related to the above claim.

Due to the limited information available on the above claim and potential other claims, and the uncertainty of the outcome of the consolidated class
certification application, no costs estimation can as yet be made for the possible obligation.

F-59

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

SUBSEQUENT EVENTS

(a)

(b)

SEGMENT REPORT

ACCOUNTING POLICY

A reconciliation of the segment totals to the group financial statements has been included in note 37.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The chief
operating decision-maker has been identified as the executive committee.

Harmony has signed a US$12.0 million guarantee for the ARM Broad Based Economic Empowerment (BBEE) Trust, a member of the African
Rainbow Minerals (ARM) group. The guarantee is for additional security for the ARM BBEE Trust loan due to Nedbank Limited. The fair value of the
guarantee is US$1.1 million at 30 September 2015.

On 27 September 2015, 2 259 performance shares (ordinary shares) vested in the name of Graham Briggs. There were no further changes in the
shares held by directors between 30 June 2015 and 23 October 2015.

The group has one main economic product, being gold. In order to determine operating and reportable segments, management reviewed various
factors, including geographical location as well as managerial structure. It was determined that an operating segment consists of a shaft or a group of
shafts or open pit mine managed by a single general manager and management team.

After applying the quantitative thresholds from IFRS 8, the reportable segments were determined as: Kusasalethu, Doornkop, Phakisa, Tshepong,
Masimong, Target 1, Bambanani, Joel, Unisel, Target 3 and Hidden Valley. All other operating segments have been grouped together under all other
surface operations.

When assessing profitability, the CODM considers the revenue and production costs of each segment. The net of these amounts is the production profit
or loss. Therefore, production profit has been disclosed in the segment report as the measure of profit or loss. The CODM also considers capital
expenditure when assessing the overall economic sustainability of each segment. The CODM, however, does not consider depreciation or impairment
and therefore these amounts have not been disclosed in the segment report.

Segment assets consist of mining assets and mining assets under construction included under property, plant and equipment which can be attributed to
the segment. Current and non-current group assets that are not allocated at a segment level form part of the reconciliation to total assets.

F-60

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

36 SEGMENT REPORT continued

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

2015

2014

2013

Continuing operations

South Africa
Underground
Kusasalethu

169

189

137

174

169

168

( 5)

( 31)

298

341

344

127 092

150 916

88 093

1 001

1 260

784

Doornkop

107

109

183

106

118

184

319

338

85 618

83 687

116 738

665

812

1 112

Phakisa

124

124

125

103

103

111

354

433

455

100 246

95 680

78 255

674

636

565

Tshepong

170

176

214

141

132

162

331

372

388

137 540

135 772

133 554

1 095

1 044

1 147

Masimong

113

186

110

100

79 187

87 385

116 256

739

739

958

Target 1

152

188

203

104

101

106

229

261

271

122 944

144 453

127 542

826

851

790

Bambanani³

116

124

106

93 495

95 424

66 970

253

263

231

Joel

165

72 596

75 072

103 782

607

604

674

Unisel

54 495

59 093

58 289

460

450

492

Target 3⁴

15 529

45 429

52 277

331

355

Surface
All other surface operations

117

122

172

115

94 105

93 236

110 534

11 488

11 516

11 118

Total South Africa

1 230

1 377

1 668

1 003

1 043

1 153

227

334

515

1 718

2 106

2 149

205

231

295

982 847

1 066 147

1 052 290

17 907

18 506

18 226

International
Hidden Valley

118

138

135

100

105

130

114

340

387

94 619

105 840

85 007

2 012

2 207

2 033

Total international

118

138

135

100

105

130

114

340

387

94 619

105 840

85 007

2 012

2 207

2 033

Total continuing operations

1 348

1 515

1 803

1 103

1 148

1 283

245

367

520

1 832

2 446

2 536

216

243

352

1 077 466

1 171 987

1 137 297

19 919

20 713

20 259

Discontinued operations

Evander

102

62 855

430

Total discontinued operations

102

62 855

430

Total operations

1 348

1 515

1 905

1 103

1 148

1 346

245

367

559

1 832

2 446

2 536

216

243

368

1 077 466

1 171 987

1 200 152

19 919

20 713

20 689

( 102)

( 63)

1 140

1 406

1 685

1 348

1 515

1 803

1 103

1 148

1 283

2 972

3 852

4 221

¹ Capital expenditure for international operations excludes expenditure on Golpu of US$10 million (2014: US$1 million) (2013: US$61 million).

² Production statistics are unaudited.

³ Includes Steyn 2 for the June 2014 amounts.

⁴ Target 3 was placed on care and maintenance in October 2014.

Reconciliation of the segment
information to the consolidated income
statements and balance sheets (refer
to note 37)

Tons milled ²

30 June

US$ million

t'000

Revenue

30 June

Production cost

30 June

Production profit/(loss)

30 June

Mining assets

30 June

Capital expenditure ¹

30 June

Ounces produced ²

30 June

F-61

NOTES TO THE GROUP FINANCIAL STATEMENTS continued

for the years ended 30 June 2015

Figures in million

2015

2014

2013

Revenue from:

Discontinued operations

102

Production costs from:

Discontinued operations

(63)

Reconciliation of production profit to consolidated loss before taxation

Total segment revenue

1 348

1 515

1 905

Total segment production costs

(1 103)

(1 148)

(1 346)

Production profit

245

367

559

Less discontinued operations

(39)

245

367

520

Cost of sales items other than production costs

(542)

(401)

(546)

Amortisation and depreciation of mining assets

(211)

(202)

(222)

Amortisation and depreciation of assets other than mining assets

(5)

(5)

Rehabilitation credit/(expenditure)

(1)

Care and maintenance costs of restructured shafts

(9)

(6)

(8)

Employment termination and restructuring costs

(22)

(26)

(5)

Share-based payments

(18)

(26)

(30)

Impairment of assets

(285)

(135)

(274)

Other

(4)

Gross loss

(297)

(34)

(26)

Corporate, administration and other expenditure

(33)

(42)

(53)

Social investment expenditure

(6)

(9)

(14)

Exploration expenditure

(23)

(44)

(76)

Profit on sale of property, plant and equipment

Loss on scrapping of property, plant and equipment

(42)

Other expenses (net)

(33)

(20)

(40)

Operating loss

(433)

(146)

(193)

Loss from associate

(2)

(10)

Profit on disposal/(impairment) of investments

(10)

Net gain on financial instruments

Investment income

Finance costs

(22)

(27)

(29)

Loss before taxation

(436)

(145)

(191)

Reconciliation of total segment assets to consolidated assets includes the following:

Non-current assets

Property, plant and equipment

598

670

743

Intangible assets

220

Restricted cash

Restricted investments

196

217

206

Deferred tax asset

Investments in associates

Investments in financial assets

Inventories

Trade and other receivables

Current assets

Inventories

106

145

142

Trade and other receivables

116

Income and mining taxes

Restricted cash

Cash and cash equivalents

172

209

1 140

1 406

1 685

RECONCILIATION OF SEGMENT INFORMATION TO CONSOLIDATED INCOME STATEMENTS AND BALANCE
SHEETS

US dollar

F-62