HMY Harmony Gold Mining Company Limited

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Responsible stewardship	Operational excellence	Cash certainty	Effective capital allocation
• Agile COVID-19 response and measures implemented embed our commitment to the “S” in ESG** • Improved scores as a FTSE4Good constituent for 2020 • Included in the Bloomberg Gender Equality Index (GEI) 2020 for a second consecutive year	• 9% increase in production profit • Higher underground recovered grade of 5.72g/t mined in Q4 of FY20 • Better than expected production performance in Q4 of FY20	• 85% increase in operating free cash flow margin • 25.4% increase in gold price received	• Successful capital raise for the Mponeng and Mine Waste Solutions acquisition • Pipeline of organic projects

		12 months ended 30 June 2020		12 months ended 30 June 2019		% Change
Gold produced	kg	37 863		44 734		(15	)
	oz	1 217 323		1 438 231		(15	)
Underground grade	g/t	5.45		5.59		(3	)
Gold price received	R/kg	735 569		586 653		25
	US$/oz	1 461		1 287		14
Cash operating costs	R/kg	553 513		439 722		(26	)
	US$/oz	1 099		965		(14	)
Total costs and capital	R/kg	647 364		544 487		(19	)
	US$/oz	1 286		1 194		(8	)
All-in sustaining costs	R/kg	651 356		550 005		(18	)
	US$/oz	1 293		1 207		(7	)
Production profit	R million	7 197		6 588		9
	US$ million	459		465		(1	)
Exchange rate	R:US$	15.66		14.18		10

FINANCIAL RESULTS

		12 months ended 30 June 2020		12 months ended 30 June 2019		% Change
Basic loss per share	SA cents	(164	)	(498	)	67
	US cents	(10	)	(35	)	71
Headline earnings/(loss)	R million	(828	)	1 067		(178	)
	US$ million	(53	)	75		(171	)
Headline earnings/(loss) per share	SA cents	(154	)	204		(175	)
	US cents	(10	)	14		(171	)

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•	Ongoing preventive measures

•	Continuing risk assessment of workplaces and monitoring of vulnerable employees

•	Screening, testing, tracing, isolation, quarantine, reporting and management of cases

•	Collaboration regionally with our peer companies and public health authorities

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•	A contingent consideration of US$260 per ounce on underground gold production from the Mponeng, Savuka and TauTona mines that exceeds 250 000 ounces per annum for a period of six years commencing on 1 January 2021 ("Mponeng Contingent Consideration"). Based on AngloGold's current production forecast, the Mponeng Contingent Consideration has a value of approximately US$100 million

•	A contingent consideration of US$20 per ounce in relation to underground production sourced within the West Wits mineral rights (comprising the Mponeng, Savuka and TauTona mines) below the current infrastructure if it is developed

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•	A gold price of US$1 350/oz

•	An exchange rate of R14.51/US$

•	The above parameters resulted in a Rand gold price of R630 000/kg for the South African assets

•	The Hidden Valley mine and the Golpu project used commodity prices of US$1 350/oz Au, US$17.00/oz Ag, US$10.00/lb Mo and US$3.00/lb Cu at an exchange rate of US$0.72/A$

•	Gold equivalent ounces are calculated assuming US$1 350/oz Au, US$3.00/lb Cu and US$17.00/oz Ag, and assuming a 100% recovery for all metals

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	Mineral resources: Gold and gold equivalents	Measured						Indicated						Inferred						Total
		Tonnes (Mt)		g/t		Gold  ‘000oz		Tonnes (Mt)		g/t		Gold ‘000oz		Tonnes (Mt)		g/t		Gold ‘000oz		Tonnes (Mt)		g/t		Gold ‘000oz
	SA underground	70.3		8.74		19 775		70.5		9.31		21 092		73.9		9.25		21 986		214.8		9.10		62 853
	SA surface including Kalgold	251.0		0.30		2 404		781.4		0.29		7 389		60.4		0.32		615		1 092.8		0.30		10 408
	Total South Africa	321.4				22 179		851.9				28 481		134.3				22 601		1 307.5				73 261
	Hidden Valley	2.3		1.32		98		61.9		1.53		3 052		1.5		1.08		50		65.7		1.52		3 201
	Wafi-Golpu system*	—		—		—		399.0		0.84		10 800		110.0		0.76		2 700		504.0		0.83		13 500
	Kili Teke	—		—		—		—		—		—		237.0		0.24		1 810		237.0		0.24		1 810
	Total Papua New Guinea	2.3				98		460.9				13 852		348.4				4 561		806.6				18 511
	Total gold resources	323.7				22 277		1 312.8				42 333		482.7				27 162		2 114.2				91 772
	Hidden Valley – gold equivalent ounces	2.3				26		60.0				566		1.3				10		63.6				602
	Wafi-Golpu – gold equivalent ounces*	—				—		345.0				19 150		90.0				3 200		430.0				22 350
	Kili Teke – gold equivalent ounces	—				—		—				—		237.0				3 926		237.0				3 926
	Total gold equivalent resources**	2.3				26		405.0				19 716		328.2				7 136		730.5				26 877
	Total Harmony gold and gold equivalent resources**	323.7				22 303		1 312.8				62 049		482.7				34 297		2 114.2				118 649

Mineral resources: Silver and copper (used in equivalent calculations)	Measured						Indicated						Inferred						Total
	Tonnes (Mt)		g/t		Silver ‘000oz		Tonnes (Mt)		g/t		Silver ‘000oz		Tonnes (Mt)		g/t		Silver ‘000oz		Tonnes (Mt)		g/t		Silver ‘000oz
Hidden Valley	2.3		27.37		2 029		60.0		23.29		44 917		1.3		19.92		808		63.6		23.37		47 754
	Measured						Indicated						Inferred						Total
	Tonnes (Mt)		%		Copper ‘Mlb		Tonnes (Mt)		%		Copper ‘Mlb		Tonnes (Mt)		%		Copper ‘Mlb		Tonnes (Mt)		%		Copper ‘Mlb
Golpu*	—		—		—		345.0		1.00		8 250		70.0		0.85		1 250		410.0		1.00		9 500
Nambonga*	—		—		—		—		—		—		20.0		0.20		88		20.0		0.20		88
Kili Teke	—		—		—		—		—		—		237.0		0.34		1 767		237.0		0.34		1 767
Total	—		—		—		345.0		1.00		8 250		327.0		0.44		3 105		667.0		0.77		11 355

Mineral reserves: Gold and gold equivalents	Proved						Probable						Total
	Tonnes (Mt)		g/t		Gold ‘000oz		Tonnes (Mt)		g/t		Gold ‘000oz		Tonnes (Mt)		g/t		Gold ‘000oz
SA underground	39.9		5.85		7 508		17.0		5.92		3 242		56.9		5.87		10 750
SA surface including Kalgold	164.0		0.30		1 576		637.1		0.25		5 072		801.1		0.26		6 648
Total South Africa	203.9				9 084		654.1				8 314		858.0				17 398
Hidden Valley	2.3		1.32		98		14.5		1.61		749		16.8		1.57		847
Wafi-Golpu system*	—		—		—		200.0		0.86		5 500		200.0		0.86		5 500
Total Papua New Guinea	2.3				98		214.5				6 249		216.8				6 347
Total gold reserves	206.2				9 182		868.6				14 563		1 074.8				23 746
Hidden Valley – gold equivalent ounces	2.3				36		14.2				178		16.5				214
Wafi-Golpu – gold equivalent ounces*							200.0				12 538		200.0				12 538
Total gold equivalent reserves**	2.3				36		214.2				12 716		216.5				12 752
Total Harmony gold and gold equivalent reserves**	206.2				9 218		868.6				27 279		1 074.8				36 497

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Mineral reserves: Silver and copper (used in equivalent calculations)	Proved						Probable						Total
	Tonnes (Mt)		g/t		Silver ‘000oz		Tonnes (Mt)		g/t		Silver ‘000oz		Tonnes (Mt)		g/t		Silver ‘000oz
Hidden Valley	2.3		27.37		2 029		14.2		24.83		11 314		16.5		25.18		13 343
	Proved						Probable						Total
	Tonnes (Mt)		%		Copper ‘Mlb		Tonnes (Mt)		%		Copper ‘Mlb		Tonnes (Mt)		%		Copper ‘Mlb
Golpu*	—		—		—		200.0		1.20		5 400		200.0		1.20		5 400

*	Represents Harmony’s equity portion of 50%.

**

In instances where individual deposits may contain multiple valuable commodities with a reasonable expectation of being recovered (for example gold and copper in a single deposit), Harmony computes a gold equivalent to more easily assess the value of the deposit against gold-only mines. Harmony does this by calculating the value of each of the deposits' commodities, then dividing the product by the price of gold. For example, the gold equivalent ounces for the copper portion of a deposit would be calculated as follows: (copper pounds x copper price per pound)/gold price per ounce. All gold equivalent calculations are done using metal prices and parameters as stipulated above.

***	Rounding of numbers may result in slight computational discrepancies.

•	Brownfield exploration at Hidden Valley and Kalgold to optimise existing open pit operations and extend mine life;

•	Brownfield exploration at our underground operations in South Africa;

•	Greenfields exploration at Target North

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OPERATING RESULTS – YEAR ON YEAR (RAND/METRIC)

		Year ended	SOUTH AFRICA																																Hidden Valley		TOTAL HARMONY
			UNDERGROUND PRODUCTION																				SURFACE PRODUCTION										TOTAL SOUTH AFRICA
			Tshepong Operations		Moab Khotsong		Bambanani		Joel		Doornkop		Target 1		Kusasalethu		Masimong		Unisel		TOTAL UNDER- GROUND		Phoenix		Central plant reclamation		Dumps		Kalgold		TOTAL SURFACE
Ore milled	- t'000	Jun-20	1 417		746		200		349		681		543		615		489		219		5 259		6 227		4 020		4 476		1 541		16 264		21 523		3 906		25 429
		Jun-19	1 612		970		230		429		730		588		742		602		256		6 159		6 133		3 872		4 307		1 619		15 931		22 090		3 886		25 976
Yield	- g/tonne	Jun-20	5.15		8.84		10.66		3.99		4.40		4.13		4.90		4.09		4.48		5.45		0.131		0.155		0.392		0.75		0.27		1.53		1.25		1.49
		Jun-19	4.94		8.17		10.93		3.65		4.48		4.51		6.72		3.84		4.73		5.59		0.123		0.150		0.352		0.77		0.26		1.74		1.60		1.72
Gold produced	- kg	Jun-20	7 293		6 592		2 132		1 391		2 994		2 244		3 015		1 999		982		28 642		818		625		1 753		1 153		4 349		32 991		4 872		37 863
		Jun-19	7 967		7 928		2 515		1 567		3 273		2 653		4 989		2 309		1 212		34 413		756		579		1 515		1 249		4 099		38 512		6 222		44 734
Gold sold	- kg	Jun-20	7 399		6 799		2 162		1 412		3 038		2 237		3 085		2 027		994		29 153		823		625		1 780		1 151		4 379		33 532		4 949		38 481
		Jun-19	7 922		7 794		2 495		1 612		3 255		2 685		5 028		2 291		1 207		34 289		750		577		1 497		1 263		4 087		38 376		6 192		44 568
Gold price received	- R/kg	Jun-20	736 863		736 533		735 972		734 620		747 282		681 388		743 153		691 282		684 727		729 159		715 787		749 216		779 835		742 533		753 623		732 354		757 348		735 569
		Jun-19	591 331		573 522		591 962		593 531		593 301		590 298		591 742		593 003		590 468		587 680		577 889		592 359		587 483		593 482		588 265		587 742		579 902		586 653
Gold revenue	(R'000)	Jun-20	5 452 051		5 007 690		1 591 172		1 037 283		2 270 244		1 524 266		2 292 627		1 401 229		680 619		21 257 181		589 093		468 260		1 388 107		854 656		3 300 116		24 557 297		3 748 117		28 305 414
		Jun-19	4 684 522		4 470 030		1 476 946		956 772		1 931 194		1 584 950		2 975 279		1 358 570		712 695		20 150 958		433 417		341 791		879 462		749 568		2 404 238		22 555 196		3 590 755		26 145 951
Cash operating cost (net of by-product credits)	(R'000)	Jun-20	4 251 948		3 282 504		1 024 682		998 771		1 699 491		1 504 932		2 562 092		1 240 988		572 775		17 138 183		363 169		233 624		853 347		673 603		2 123 743		19 261 926		1 695 719		20 957 645
		Jun-19	4 007 667		3 166 555		984 749		967 021		1 593 279		1 478 422		2 376 844		1 213 849		568 559		16 356 945		344 260		212 125		691 557		694 797		1 942 739		18 299 684		1 370 850		19 670 534
Inventory movement	(R'000)	Jun-20	46 291		61 007		15 445		11 265		30 661		(5 754)		15 054		17 088		7 503		198 560		2 722		815		7 316		(1 834)		9 019		207 579		(56 565)		151 014
		Jun-19	(34 242)		(65 616)		9 166		4 417		(29 489)		12 921		17 679		(8 683)		(4 204)		(98 051)		(3 083)		(78)		(7 358)		5 149		(5 370)		(103 421)		(8 794)		(112 215)
Operating costs	(R'000)	Jun-20	4 298 239		3 343 511		1 040 127		1 010 036		1 730 152		1 499 178		2 577 146		1 258 076		580 278		17 336 743		365 891		234 439		860 663		671 769		2 132 762		19 469 505		1 639 154		21 108 659
		Jun-19	3 973 425		3 100 939		993 915		971 438		1 563 790		1 491 343		2 394 523		1 205 166		564 355		16 258 894		341 177		212 047		684 199		699 946		1 937 369		18 196 263		1 362 056		19 558 319
Production profit	(R'000)	Jun-20	1 153 812		1 664 179		551 045		27 247		540 092		25 088		(284 519)		143 153		100 341		3 920 438		223 202		233 821		527 444		182 887		1 167 354		5 087 792		2 108 963		7 196 755
		Jun-19	711 097		1 369 091		483 031		(14 666)		367 404		93 607		580 756		153 404		148 340		3 892 064		92 240		129 744		195 263		49 622		466 869		4 358 933		2 228 699		6 587 632
Capital expenditure	(R'000)	Jun-20	929 680		497 628		49 880		150 893		280 694		346 833		188 384		23 777		7 487		2 475 256		6 883		11 875		1 760		98 598		119 116		2 594 372		959 141		3 553 513
		Jun-19	1 130 180		558 876		61 093		187 092		308 324		297 265		315 921		109 386		45 426		3 013 563		5 757		7 084		7 682		61 179		81 702		3 095 265		1 591 274		4 686 539
Cash operating costs	- R/kg	Jun-20	583 018		497 953		480 620		718 024		567 632		670 647		849 782		620 804		583 274		598 358		443 972		373 798		486 792		584 218		488 329		583 854		348 054		553 513
		Jun-19	503 033		399 414		391 550		617 116		486 795		557 264		476 417		525 703		469 108		475 313		455 370		366 364		456 473		556 283		473 954		475 168		220 323		439 722
Cash operating costs	- R/tonne	Jun-20	3 001		4 400		5 123		2 862		2 496		2 772		4 166		2 538		2 615		3 259		58		58		191		437		131		895		434		824
		Jun-19	2 486		3 264		4 282		2 254		2 183		2 514		3 203		2 016		2 221		2 656		56		55		161		429		122		828		353		757
Cash operating cost and Capital	- R/kg	Jun-20	710 493		573 442		504 016		826 502		661 384		825 207		912 264		632 699		590 898		684 779		452 386		392 798		487 796		669 732		515 718		662 493		544 922		647 364
		Jun-19	644 891		469 908		415 842		736 511		580 997		669 313		539 740		573 077		506 588		562 883		462 985		378 599		461 544		605 265		493 887		555 540		476 073		544 487
All-in sustaining cost	- R/kg	Jun-20	713 202		566 942		522 990		826 970		649 041		817 066		923 054		655 888		613 382		686 598		453 937		389 611		484 507		690 239		519 293		664 451		562 648		651 356
		Jun-19	636 281		477 581		441 226		701 644		572 132		662 816		556 621		593 408		523 823		566 572		462 579		378 038		462 178		624 147		500 426		558 494		497 399		550 005
Operating free cash flow margin¹	%	Jun-20	5	%	25	%	32	%	(11	)%	13	%	(21	)%	(20	)%	10	%	15	%	8	%	37	%	48	%	38	%	10	%	32	%	11	%	23	%	13	%
		Jun-19	(10	)%	17	%	29	%	(21	)%	2	%	(12	)%	9	%	3	%	14	%	4	%	19	%	36	%	20	%	(1	)%	16	%	5	%	16	%	7	%

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OPERATING RESULTS – YEAR ON YEAR (US$/IMPERIAL)

		Year ended	SOUTH AFRICA																																Hidden Valley		TOTAL HARMONY
			UNDERGROUND PRODUCTION																				SURFACE PRODUCTION										TOTAL SOUTH AFRICA
			Tshepong Operations		Moab Khotsong		Bambanani		Joel		Doornkop		Target 1		Kusasalethu		Masimong		Unisel		TOTAL UNDER- GROUND		Phoenix		Central plant reclamation		Dumps		Kalgold		TOTAL SURFACE
Ore milled	- t'000	Jun-20	1 562		822		221		384		750		598		678		539		242		5 796		6 866		4 433		4 936		1 700		17 935		23 731		4 307		28 038
		Jun-19	1 777		1 069		254		473		805		650		817		664		283		6 792		6 762		4 269		4 749		1 785		17 565		24 357		4 285		28 642
Yield	- oz/ton	Jun-20	0.150		0.258		0.310		0.116		0.128		0.121		0.143		0.119		0.130		0.159		0.004		0.005		0.011		0.022		0.008		0.045		0.036		0.043
		Jun-19	0.144		0.238		0.318		0.107		0.131		0.131		0.196		0.112		0.138		0.163		0.004		0.004		0.010		0.022		0.008		0.051		0.047		0.050
Gold produced	- oz	Jun-20	234 475		211 938		68 545		44 722		96 259		72 146		96 934		64 269		31 573		920 861		26 299		20 094		56 360		37 070		139 823		1 060 684		156 639		1 217 323
		Jun-19	256 146		254 891		80 860		50 379		105 229		85 296		160 400		74 237		38 966		1 106 404		24 306		18 615		48 708		40 156		131 785		1 238 189		200 042		1 438 231
Gold sold	- oz	Jun-20	237 882		218 592		69 510		45 397		97 673		71 921		99 185		65 169		31 958		937 287		26 459		20 093		57 229		37 006		140 787		1 078 074		159 113		1 237 187
		Jun-19	254 698		250 583		80 216		51 827		104 650		86 324		161 653		73 657		38 807		1 102 415		24 113		18 551		48 129		40 605		131 398		1 233 813		199 077		1 432 890
Gold price received	- $/oz	Jun-20	1 463		1 463		1 461		1 459		1 484		1 353		1 476		1 373		1 360		1 448		1 421		1 488		1 549		1 474		1 497		1 454		1 504		1 461
		Jun-19	1 297		1 258		1 299		1 302		1 302		1 295		1 298		1 301		1 295		1 289		1 268		1 299		1 289		1 302		1 290		1 289		1 272		1 287
Gold revenue	($'000)	Jun-20	348 078		319 708		101 586		66 224		144 940		97 314		146 369		89 459		43 453		1 357 131		37 610		29 895		88 622		54 564		210 691		1 567 822		239 293		1 807 115
		Jun-19	330 389		315 262		104 166		67 479		136 203		111 783		209 840		95 817		50 265		1 421 204		30 568		24 106		62 027		52 865		169 566		1 590 770		253 248		1 844 018
Cash operating cost (net of by-product credits)	($'000)	Jun-20	271 459		209 567		65 419		63 765		108 502		96 080		163 573		79 229		36 568		1 094 162		23 186		14 915		54 480		43 006		135 587		1 229 749		108 260		1 338 009
		Jun-19	282 652		223 330		69 452		68 202		112 371		104 270		167 634		85 610		40 099		1 153 620		24 280		14 961		48 774		49 003		137 018		1 290 638		96 684		1 387 322
Inventory movement	($'000)	Jun-20	2 955		3 895		986		719		1 958		(367)		961		1 091		479		12 677		174		52		467		(117)		576		13 253		(3 611)		9 642
		Jun-19	(2 415)		(4 628)		646		312		(2 080)		911		1 247		(612)		(296)		(6 915)		(217)		(6)		(519)		363		(379)		(7 294)		(620)		(7 914)
Operating costs	($'000)	Jun-20	274 414		213 462		66 405		64 484		110 460		95 713		164 534		80 320		37 047		1 106 839		23 360		14 967		54 947		42 889		136 163		1 243 002		104 649		1 347 651
		Jun-19	280 237		218 702		70 098		68 514		110 291		105 181		168 881		84 998		39 803		1 146 705		24 063		14 955		48 255		49 366		136 639		1 283 344		96 064		1 379 408
Production profit	($'000)	Jun-20	73 664		106 246		35 181		1 740		34 480		1 601		(18 165)		9 139		6 406		250 292		14 250		14 928		33 675		11 675		74 528		324 820		134 644		459 464
		Jun-19	50 152		96 560		34 068		(1 035)		25 912		6 602		40 959		10 819		10 462		274 499		6 505		9 151		13 772		3 499		32 927		307 426		157 184		464 610
Capital expenditure	($'000)	Jun-20	59 355		31 769		3 185		9 634		17 921		22 144		12 027		1 518		478		158 031		439		758		112		6 294		7 603		165 634		61 236		226 870
		Jun-19	79 709		39 417		4 308		13 195		21 744		20 966		22 281		7 714		3 205		212 539		406		500		542		4 315		5 763		218 302		112 229		330 531
Cash operating cost	- $/oz	Jun-20	1 158		989		954		1 426		1 127		1 332		1 687		1 233		1 158		1 188		882		742		967		1 160		970		1 159		691		1 099
		Jun-19	1 103		876		859		1 354		1 068		1 222		1 045		1 153		1 029		1 043		999		804		1 001		1 220		1 040		1 042		483		965
Cash operating costs	- $/t	Jun-20	174		255		296		166		145		161		241		147		151		189		3		3		11		25		8		52		25		48
		Jun-19	159		209		273		144		140		160		205		129		142		170		4		4		10		27		8		53		23		48
Cash operating cost and Capital	- $/oz	Jun-20	1 411		1 139		1 001		1 641		1 313		1 639		1 812		1 256		1 173		1 360		898		780		969		1 330		1 024		1 316		1 082		1 286
		Jun-19	1 415		1 031		912		1 616		1 275		1 468		1 184		1 257		1 111		1 235		1 016		831		1 012		1 328		1 083		1 219		1 044		1 194
All-in sustaining cost	- $/oz	Jun-20	1 416		1 126		1 039		1 642		1 289		1 623		1 833		1 302		1 218		1 363		901		774		962		1 371		1 031		1 319		1 120		1 293
		Jun-19	1 396		1 048		968		1 539		1 255		1 454		1 221		1 302		1 149		1 243		1 015		829		1 014		1 369		1 098		1 225		1 090		1 207
Operating free cash flow margin¹	%	Jun-20	5	%	25	%	32	%	(11	)%	13	%	(21	)%	(20	)%	10	%	15	%	8	%	37	%	48	%	38	%	10	%	32	%	11	%	23	%	13	%
		Jun-19	(10	)%	17	%	29	%	(21	)%	2	%	(12	)%	9	%	3	%	14	%	4	%	19	%	36	%	20	%	(1	)%	16	%	5	%	16	%	7	%

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CONDENSED CONSOLIDATED INCOME STATEMENT (RAND)

		Year ended
Figures in million	Notes	30 June 2020 (Reviewed)		30 June 2019 (Audited)
Revenue	3	29 245		26 912
Cost of sales	4	(25 908	)	(28 869	)
Production costs		(22 048	)	(20 324	)
Amortisation and depreciation		(3 508	)	(4 054	)
Impairment of assets		—		(3 898	)
Other items		(352	)	(593	)
Gross profit/(loss)		3 337		(1 957	)
Corporate, administration and other expenditure		(611	)	(731	)
Exploration expenditure		(205	)	(148	)
Gains/(losses) on derivatives	11	(1 678	)	484
Other operating expenses	5	(1 201	)	(186	)
Operating loss		(358	)	(2 538	)
Share of profits from associates		94		59
Acquisition costs	17	(45	)	—
Investment income		375		308
Finance costs		(661	)	(575	)
Loss before taxation		(595	)	(2 746	)
Taxation	6	(255	)	139
Current taxation		(58	)	(143	)
Deferred taxation		(197	)	282
Net loss for the year		(850	)	(2 607	)
Attributable to:
Non-controlling interest		28		—
Owners of the parent		(878	)	(2 607	)
Loss per ordinary share (cents)	7
Basic loss		(164	)	(498	)
Diluted loss		(166	)	(500	)

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (RAND)

		Year ended
Figures in million	Notes	30 June 2020 (Reviewed)		30 June 2019 (Audited)
Net loss for the year		(850	)	(2 607	)
Other comprehensive income for the year, net of income tax		(1 958	)	(684	)
Items that may be reclassified subsequently to profit or loss:		(1 998	)	(677	)
Foreign exchange translation gain/(loss)	2	1 199		(50	)
Remeasurement of gold hedging contracts	11	(3 197	)	(626	)
Items that will not be reclassified to profit or loss:		40		(7	)
Gain on assets measured at fair value through other comprehensive income		25		—
Remeasurement of retirement benefit obligation
Actuarial gain/(loss) recognised during the year		17		(7	)
Deferred taxation thereon		(2	)	—
Total comprehensive income for the year		(2 808	)	(3 291	)
Attributable to:
Non-controlling interest		12		—
Owners of the parent		(2 820	)	(3 291	)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (RAND)

FOR THE YEAR ENDED 30 JUNE 2020

Figures in million		Share capital		Accumulated loss		Other reserves		Non-controlling interest		Total
Balance – 1 July 2019		29 551		(11 710	)	4 773		—		22 614
Issue of shares1		3 386		—		—		—		3 386
Share-based payments		—		—		186		—		186
Recognition of non-controlling interest2		—		5		—		(5	)	—
Net profit/(loss) for the year		—		(878	)	—		28		(850	)
Other comprehensive income for the year		—		—		(1 942	)	(16	)	(1 958	)
Dividends paid		—		—		—		(3	)	(3	)
Balance – 30 June 2020 (Reviewed)		32 937		(12 583	)	3 017		4		23 375
Balance – 1 July 2018		29 340		(9 103	)	5 227		—		25 464
Issue of shares		211		—		—		—		211
Share-based payments		—		—		230		—		230
Net loss for the year		—		(2 607	)	—		—		(2 607	)
Other comprehensive income for the year		—		—		(684	)	—		(684	)
Balance – 30 June 2019 (Audited)		29 551		(11 710	)	4 773		—		22 614

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CONDENSED CONSOLIDATED BALANCE SHEET (RAND)

		At
Figures in million	Notes	30 June 2020 (Reviewed)		30 June 2019 (Audited)
ASSETS
Non-current assets
Property, plant and equipment	8	29 186		27 749
Intangible assets	8	536		533
Restricted cash		107		92
Restricted investments		3 535		3 301
Investments in associates		146		110
Inventories		47		43
Deferred tax assets	6	531		1
Other non-current assets		388		333
Derivative financial assets	11	50		197
Total non-current assets		34 526		32 359
Current assets
Inventories	12	2 421		1 967
Restricted cash		62		44
Trade and other receivables	10	1 308		1 064
Derivative financial assets	11	18		309
Cash and cash equivalents	18	6 357		993
Total current assets		10 166		4 377
Total assets		44 692		36 736
EQUITY AND LIABILITIES
Share capital and reserves
Attributable to equity holders of the parent company		23 371		22 614
Share capital	17	32 937		29 551
Other reserves		3 017		4 773
Accumulated loss		(12 583	)	(11 710	)
Non-controlling interest	16	4		—
Total equity		23 375		22 614
Non-current liabilities
Deferred tax liabilities	6	996		688
Provision for environmental rehabilitation	13	3 408		3 054
Provision for silicosis settlement	14	717		942
Retirement benefit obligation		193		201
Borrowings	15	7 463		5 826
Other non-current liabilities		101		5
Derivative financial liabilities	11	879		172
Total non-current liabilities		13 757		10 888
Current liabilities
Provision for silicosis settlement	14	175		—
Borrowings	15	255		89
Trade and other payables		3 006		2 875
Derivative financial liabilities	11	4 124		270
Total current liabilities		7 560		3 234
Total equity and liabilities		44 692		36 736

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CONDENSED CONSOLIDATED CASH FLOW STATEMENT (RAND)

FOR THE YEAR ENDED 30 JUNE 2020

		Year ended
Figures in million	Notes	30 June 2020 (Reviewed)		30 June 2019 (Audited)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated by operations		5 031		5 052
Interest received		86		69
Interest paid		(370	)	(387	)
Income and mining taxes paid		(24	)	(55	)
Cash generated from operating activities		4 723		4 679
CASH FLOW FROM INVESTING ACTIVITIES
Increase in restricted cash		(21	)	(15	)
Decrease in amounts invested in restricted investments	19	5		187
Redemption of preference shares from associates		59		32
Capital distributions from investments		7		30
Proceeds from disposal of property, plant and equipment		2		5
Additions to property, plant and equipment	19	(3 610	)	(5 036	)
Cash utilised by investing activities		(3 558	)	(4 797	)
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings raised	15	6 541		1 522
Borrowings repaid	15	(5 661	)	(1 353	)
Proceeds from the issue of shares	17	3 466		211
Dividends paid to non-controlling interests	16	(3	)	—
Lease payments		(38	)	—
Cash generated from financing activities		4 305		380
Foreign currency translation adjustments		(106	)	25
Net increase in cash and cash equivalents		5 364		287
Cash and cash equivalents – beginning of year		993		706
Cash and cash equivalents – end of year		6 357		993

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

1.	ACCOUNTING POLICIES

Basis of accounting

The condensed consolidated financial statements for the year ended 30 June 2020 are prepared in accordance with the requirements of the JSE Limited Listings Requirements for provisional reports and the requirements of the Companies Act no. 71 of 2008 of South Africa. The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial statements except for the changes discussed below.

The condensed consolidated financial statements have been prepared on a going concern basis.

Impact of the adoption of IFRS 16 – Leases

Scope of IFRS 16

IFRS 16 replaces the previous accounting standard on leases, IAS 17 Leases and related Interpretations. The new standard introduces a single lease accounting model and requires a lessee to capitalise most leases with certain exemptions. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments.

Transition

The group has elected to apply IFRS 16 utilising the modified retrospective approach, under which the cumulative effect of adopting the new standard is recognised as an adjustment to the opening balance of retained earnings at 1 July 2019 with no restatement of comparative information. The cumulative effect of adopting the standard had no impact on opening retained earnings as the group has elected to recognise the right-of-use assets at an amount equal to the lease liability at 1 July 2019 together with the ability to set off deferred tax assets and liabilities resulting from the leased assets and liabilities. The lease liabilities were measured at the present value of the remaining lease payments at 1 July 2019 and discounted using the relevant incremental borrowing rate. The group has reassessed all contracts in determining the lease population. Refer to note 9 for details on the amount of right-of-use assets and lease liabilities recognised as well as the incremental borrowing rates used.

Expedients applied

The group has also applied the following practical expedients upon transition to the new standard:

•	The low value lease exemption – the group has elected to take the low value exemption with a value of R50 000 for the individual leased asset value;

•	The short-term lease exemption – leases with a duration of less than a year will be expensed in the income statement on a straight-line basis;

•	The accounting for operating leases with a remaining lease term of less than 12 months as at date of adoption will be classified as short-term leases and will not be recorded on the statement of financial position;

•	Use of hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease where appropriate;

•	Non-lease components – the group has applied the practical expedient not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component for the classes of underlying asset where it is appropriate to do so; and

•	Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application.

Accounting policy

The leases accounting policy applicable from 1 July 2019 is as follows:

The group assesses whether a contract is or contains a lease at inception of a contract. The lease contracts are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease contracts do not impose any covenants, but leased assets may not be used as security for borrowing purposes.

The group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases and leases of low value assets. For these exceptions, the group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease. The lease contracts are typically made for fixed periods of between 12 to 48 months.

21

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

1.	ACCOUNTING POLICIES continued

Impact of the adoption of IFRS 16 – Leases continued

Measurement and classification

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate. The group has applied the IFRS 16 portfolio approach in determining the discount rate for leases. As such a single discount rate has been used for contracts that share similar characteristics. The group has determined that a portfolio of contracts that are denominated in the same currency may use a single discount rate. This rate has been determined using various factors including in-country borrowings as well as other sources of finance. The nature of the right-of-use assets was also considered.

Lease payments included in the measurement of the lease liability comprise:

•	fixed lease payments (including in-substance fixed payments), less any lease incentives;

•	variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

•	the amount expected to be payable by the lessee under residual value guarantees;

•	the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

•	payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The non-current and current portions of the lease liability are included in other non-current liabilities and trade and other payables in the consolidated balance sheet respectively.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

•	the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;

•	the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

•	a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, any initial direct costs and restoration costs as described below. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Lease term

The lease term shall be determined as the non-cancellable period of a lease, together with:

•	Periods covered by an option to extend the lease if management is reasonably certain to make use of that option; and / or

•	Periods covered by an option to terminate the lease, if management is reasonably certain not to make use of that option.

Treatment of right-of-use assets

Whenever the group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented in the Property, Plant and Equipment line in the consolidated balance sheet.

The group applies its existing accounting policy on impairment of non-financial assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss accordingly.

22

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

2.	COVID-19 IMPACT

South Africa

On 27 March 2020, South Africa was placed under national lockdown, to curb the spread of the Coronavirus (COVID-19) and allow the country time in which to prepare for the demands the pandemic would have on its health care system. All of Harmony’s underground operations were placed on care and maintenance, with the surface operations permitted to continue working at close to 100% capacity.

Harmony rolled out a risk assessment-based COVID-19 prevention strategy across all of its operations before the lockdown was announced. The objective of the risk assessment was to identify, evaluate and rank the hazards associated with any exposures to COVID-19 and potential infections. It allowed the company to reduce or eliminate the probability of an employee contracting COVID-19 and to limit the severity should an employee be infected.

Harmony has been managing COVID-19 related health risks through the following measures:

•	a risk awareness campaign through various communication channels;

•	identification of high-risk employees;

•	the compulsory use of preventative personal protection equipment, which includes face masks, in designated areas in the workplace, increased hand washing and social distancing;

•	the sanitation of common areas and surfaces on a regular basis during the day;

•	placement of hand sanitisers and additional hand washing stations at the surface areas of the mines;

•	group meetings are avoided and where possible, meetings are conducted virtually in the form of tele-conferences or video-conferences;

•	implementation of work from home practices for central services and corporate office;

•	implementation of a comprehensive employee wellness monitoring and support programme, which includes a COVID-19 hotline.

On 1 May 2020, South African underground operations were granted concessions to start producing at a maximum capacity of 50% and as of 1 June 2020, operational restrictions were lifted further to allow the mining industry to operate at 100% of its labour capacity. Harmony’s COVID-19 Standard Operating Procedure (SOP) was adopted and rolled out, ensuring a safe return to work for each of its employees. Harmony’s SOP was informed by guidelines provided by the Department of Mineral Resources and Energy, the National Council for Infectious Diseases and the World Health Organisation.

The SOP included the transport of South African employees from remote labour-sending areas back to the company's mines. All requisite staffing, facilities and equipment were put in place to ensure rigorous screening as employees return to work and when at work, as well as isolate or quarantine employees infected by or exposed to COVID-19, with subsequent testing and treatment. Return to work has progressed smoothly albeit slowly, with the return of foreign nationals to South Africa taking longer than anticipated.

Papua New Guinea

Harmony’s Hidden Valley mine in Papua New Guinea has continued to operate at 100% of its labour capacity during the COVID-19 State of Emergency declared in that country. The delivery of essential supplies to the mine has continued, with strict isolation control measures in place. All non-essential staff has been removed from site and certain activities and expenditures have been curtailed to focus on safe, profitable operations during the pandemic. Protocols were adopted to allow the safe movement of personnel to and from site during this period.

Financial risk management

The effects of COVID-19 and other macro developments have increased financial risks such as exchange rate, interest rate and commodity price volatility, while also impacting on liquidity and credit risk. Management has put various measures in place to mitigate and/or manage the risks and continues monitoring the situation closely. Refer to note 18 for additional detail.

Balance sheet protection and liquidity measures

The Company committed to several measures to protect its balance sheet in the face of the global pandemic. These included cash preservation, the suspension of exploration and major capital projects and declaration of force majeure on select supplier agreements. Specific measures aimed at ensuring liquidity were undertaken, such as restructuring a portion of the derivatives maturing during April and May 2020 into the first three quarters of the new financial year, drawing down on the Rand and US Dollar facilities.

During June 2020, lenders agreed to relax certain requirements for compliance with debt covenants until December 2020. Refer to note 15 for disclosures on debt covenants.

23

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

2.	COVID-19 IMPACT continued

Financial risk management continued

Market impact

Exchange rates

Due to the impact of the COVID-19 pandemic, the Rand has weakened significantly from the beginning of the 2020 calendar year, which was at levels of around R14.00/US$1, to its weakest level at the beginning of April 2020 of R19.05. The Rand recovered through May and June and the Rand closed at R17.32 on 30 June 2020. The Rand started weakening against the Australian dollar in April 2020 and closed at R11.96/A$1 on 30 June 2020, a 21% decrease in value. These movements in the currencies expose the group's operations to foreign currency gains and losses on foreign-denominated receivables and liabilities, including derivatives, and also impact the group’s translation of its International operating results and net assets into its Rand presentation currency, which resulted in a foreign exchange translation movement of R1.2 billion.

The most significant impact was on the increase in the Rand gold price Harmony received on its gold sales, of which R2.3 billion¹ of the increase in revenue can be attributed to the exchange rate.

Commodity prices

Gold prices have rallied to an all-time high following the global economic fallout of COVID-19 and ongoing geopolitical uncertainty supporting its safe haven status with investors. The price of gold in US$ terms increased significantly over the period, closing at US$1 781/oz on 30 June 2020. This is a 26% increase from the closing price of US$1 410/oz on 30 June 2019. The average spot gold price received (that is, excluding the impact of hedging gains or losses) for the 2020 year was 21% higher at US$1 529/oz than in 2019 (US$1 263/oz), contributing approximately R5.2 billion² to the increase in revenue year on year.

Interest rates

The US Federal Reserve lowered interest rates several times during the year, the majority unrelated to the COVID-19 pandemic. The rate cuts of 25 basis points were made on each of the following dates, 31 July 2019, 18 September 2019, 30 October 2019 and 3 March 2020. At an unscheduled meeting on 15 March 2020, an additional cut of 100 basis points was announced, reducing the rate to a range of between 0% and 0.25% as a benchmark for most interest rates.

The South African Reserve Bank (SARB) announced similar decreases in the prime lending rate during the year. The rate was cut by 25 basis points at the July 2019 and January 2020 meetings respectively. Following the interest rate cut by the Federal Reserve in March 2020, the SARB also announced a 100 basis point cut. At a special unscheduled meeting in April 2020, the SARB cut the rate by a further 100 basis points. During the scheduled May 2020 meeting, another 50 basis point cut was decided on, bringing the prime lending rate to 7.25% and the total cuts for the 2020 financial year to 300 basis points.

These decreases have had a favourable impact on the cost of debt, as the debt facilities are linked to variable rates, US LIBOR and JIBAR specifically. However, the finance cost on the US-denominated debt is impacted by the movement in the Rand/US$ exchange rate.

Impact on production

Management has worked with suppliers to ensure that there are minimal disruptions to the supply chain, which would otherwise impact negatively on the ability to continue with production. Stock levels for critical production and safety items were increased to cover an additional four weeks. In South Africa, some issues have been experienced where raw materials are imported as well as where certain manufacturers have been affected by absenteeism due to COVID-19. Supplies to the operations in Papua New Guinea have not been affected as management has been able to find alternative sources where necessary.

Contributing to communities

Harmony’s response to COVID-19 demonstrated once again our ability to respond quickly to challenging issues; in this case, protecting the lives and livelihoods of our employees, ensuring the continued viability of our business, and contributing to the wellbeing of the communities around us and of the countries in which we operate.

Notwithstanding the challenges we faced during the pandemic, we provided emergency help and support in various forms to families most in need in our neighbouring communities, both in South Africa and Papua New Guinea.

¹ Calculated by multiplying actual kilograms sold by the variance in the average exchange rates year on year and 2019's average US$ gold price

² Calculated by multiplying actual kilograms sold by the variance in the average US$ gold price year on year and 2020's average exchange rate

24

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

2.	COVID-19 IMPACT continued

Taxation

In response to challenges faced by companies during the COVID-19 pandemic, governments have implemented various stimulus packages to provide some relief to companies. In South Africa, various taxes have been delayed, such as carbon tax, where the first payment has been postponed to October 2020. In addition, a tax holiday of the skills development levy was introduced.

Impact on critical estimates and judgements

The uncertainty of the impact of the COVID-19 pandemic on the global economy caused significant volatility in the markets, as discussed above. This impacted on certain assumptions and estimates as at 30 June 2020 that management used in calculations which are revised annually or assessed at each reporting date.

Key assumptions for the calculation of the mining assets' recoverable amounts include commodity prices and exchange rates. The increase in the US$ gold price and the weakening of the Rand against the US$ affected the short- and medium-term views in the forecasts management received from various institutions in order to determine the assumptions for impairment testing. However, management determined its reserves using the long-term price of US$1 350/oz or R630 000/kg and prepared the life-of-mine plans for the 2021 financial year at this price. Refer to note 8 for further details on the assumptions used in the impairment test.

The valuation of the derivatives was also impacted by the changes in the commodity prices and Rand/US$ exchange rate. Refer to notes 11 and 18 for details of the fair value movements at 30 June 2020.

The changes in the interest rates impacted on discount rates that are based on risk-free rates. These include, but are not limited to, the provisions for environmental rehabilitation, silicosis settlement and post-retirement benefits, the determination of recoverable amounts for testing impairments of non-financial assets as well as in recoverability of financial assets. Where possible and deemed relevant, management used weighted averages over a period of time to determine the estimated rates. In all cases, the discount rate decreased, the quantum of the decrease depending on whether the rate was a short-, medium- or long-term rate.

3.	REVENUE

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Revenue from contracts with customers		30 642		26 459
Gold1		29 704		25 693
Silver2		839		589
Uranium3		99		177
Hedging gain/(loss)4		(1 397	)	453
Total revenue5		29 245		26 912

1	The increase is mainly due to a higher gold price. The average gold price received increased by 25.4% to R735 569/kg from R586 653/kg in 2019. This increase is offset by the decrease in production of 15% from 44 734kg in the 2019 to 37 863kg in the current year.

2	Derived from the Hidden Valley operation in Papua New Guinea. The average silver price received increased by 24.1% year on year in Rand terms. Silver produced increased by 11% to 97 332 kg from 87 325 kg in the prior year.

3	Derived from the Moab Khotsong operation. The decrease is mainly due to lower sales volumes as a result of the South African national lockdown that took place due to COVID-19.

4	Relates to the realised effective portion of the hedge-accounted gold derivatives. Refer to note 11 for further information.

5	A geographical analysis of revenue is provided in the segment report.

25

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

4.	COST OF SALES

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Production costs – excluding royalty1		21 721		20 131
Royalty expense2		327		193
Amortisation and depreciation3		3 508		4 054
Impairment of assets4		—		3 898
Rehabilitation expenditure		47		33
Care and maintenance cost of restructured shafts		146		134
Employment termination and restructuring costs		40		242
Share-based payments		130		155
Other		(11	)	29
Total cost of sales		25 908		28 869

1	Production costs increased during the 2020 year mainly in line with expectations, with the South African national lockdown from the end of March 2020 impacting on production volumes while the cost base remained mostly unchanged. Contributing to the increase year on year is a decrease of R557 million in the capitalised stripping credit related to the Hidden Valley operation.

2	The royalty expense increased during the 2020 year due to the increased profitability as a result of the higher gold price.

3

Lower production volumes during the 2020 year, partially due to the closure of underground mines following the announcement of the South African national lockdown, impacted on the depreciation recorded and contributed to the decrease year on year. The completion of the mining of Stage 5 at Hidden Valley during the December 2019 quarter contributed to the decrease. The impairments recognised on certain operations in South Africa during the 2019 year significantly impacted on the base which depreciation is calculated on and the lower carrying values contributed to the lower total compared to the comparative period.

4	No impairments or reversal of impairments of assets were recognised during the year. Refer to note 8 for further details.

5.	OTHER OPERATING EXPENSES

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Social investment expenditure		143		155
Loss on scrapping		62		21
Foreign exchange translation loss1		892		86
Silicosis settlement provision/(reversal of provision)2		36		(62	)
Other operating (income)/expenses - net		68		(14	)
Total other operating expenses		1 201		186

1	The foreign exchange loss is driven primarily by the prevailing exchange rates at the drawdown and repayment dates of the US$ denominated loans as well as the exchange rate movements during the year. Refer to note 15 for the details of the foreign exchange translation loss on the US$ borrowings.

2	Refer to note 14 for details.

26

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

6.	TAXATION

(a)	Current taxation

The higher gold price received contributed to the tax expense for the year. The expense was partially offset by non-mining losses resulting from the derivatives in the South African entities.

(b)	Deferred taxation

Following the completion of the annual life-of-mine plans, management revised the weighted average deferred tax rates for all the South African operations. The higher gold price assumption used resulted in an increase in the estimated profitability and consequently higher rates than in the prior year. Refer to note 8 for the assumptions used. These changes, together with changes in the temporary differences, had the following impacts:

•	The change in rates on temporary differences at the individual company level, other than hedge-accounted derivatives, resulted in an increase in the deferred tax expense and liability of R493 million.

•	Unwinding of temporary differences related to unredeemed capital expenditure balance resulted in an increase of R298 million.

•

The weakening of the Rand against the US$ and the increase in the commodity prices negatively impacted on the valuation of the derivative financial instruments. Refer to notes 11 and 18 for detail. The temporary differences related to the Rand gold derivatives changed from taxable temporary differences (ie resulting in a deferred tax liability) to deductible temporary differences (resulting in a deferred tax asset). Management assessed the rates at which the temporary differences are expected to reverse and as the expected non-mining losses can be set off against the mining profits, the rates have been revised from the non-mining tax rate of 28% to the weighted average deferred tax rate. This accounts for R510 million of the deferred tax credit directly charged to other comprehensive income.

•	The net deferred tax positions for each of the group's entities are assessed separately. Two companies have net deferred tax asset positions and therefore recoverability of these assets was considered. The position at 30 June 2020 was as follows:

Figures in million	Harmony Company		Randfontein Estates
Temporary differences	1 079		(155	)
Assessed losses	574		534
Total	1 653		379
Deferred tax rate	29.8	%	10.1	%
Deferred tax asset	492		39

At 30 June 2020, management considered whether the unrecognised deferred tax asset (DTA) related to the Harmony company should be recognised, partly or in full. A portion of the DTA relates to an assessed loss of R574 million, which arose due to the foreign exchange translation losses as well as the losses from derivatives previously incurred. The company's operations include the Central Plant Reclamation (CPR), a tailings retreatment facility. As a low cost producer, its profit margins are highly sensitive to fluctuations in the gold price. In addition, the higher short-term gold price also significantly benefits Masimong's profitability, which has only two years remaining of its life. Due to the significant expected increase in the short-term Rand gold price used in the estimation of future taxable profits for the mining operations owned by the Harmony company, it is considered probable that sufficient future taxable profits will be available against which the aforementioned assessed loss and the current taxable temporary differences existing at the reporting date can be utilised. Consequently, a deferred tax asset of R492 million has been recognised, consisting of R171 million relating to the assessed loss and R321 million relating to deductible temporary differences.

Management believes there will be sufficient future taxable income from the operations owned by Randfontein Estates and therefore the entire balance of R39 million was recognised at 30 June 2020.

27

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

7.	EARNINGS/(LOSS) PER ORDINARY SHARE

		Year ended
		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Weighted average number of shares (million)		535		524
Weighted average number of diluted shares (million)		547		533
Total earnings/(loss) per share (cents):
Basic loss		(164	)	(498	)
Diluted loss1		(166	)	(500	)
Headline earnings/(loss)		(154	)	204
Diluted headline earnings/(loss)		(157	)	197

1

The dilution is as a result of the potential reduction in earnings attributable to equity holders of the parent company as a result of the exercise of the Tswelopele Beneficiation Operation (TBO) option. TBO contributed a profit for the six months ended 31 December 2019 and therefore the reduction in earnings attributable to Harmony would increase the loss and loss per share. Following the vesting of the option (refer to note 16), there has been no further impact.

Reconciliation of headline earnings:

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Net loss for the year attributable to owners of the parent		(878	)	(2 607	)
Adjusted for:
Impairment of assets		—		3 898
Taxation effect on impairment of assets		—		(239	)
Profit on sale of property, plant and equipment		(2	)	(5	)
Loss on scrapping of property, plant and equipment		62		21
Taxation effect on loss on scrapping of property, plant and equipment		(10	)	(1	)
Headline earnings/(loss)		(828	)	1 067

8.	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

Impairment of property, plant and equipment (including goodwill)

Management performed an assessment for impairment triggers as well as indications of reversal of previously recorded impairment losses at 30 June 2020. Due to the uncertainty of the impact of the COVID-19 pandemic and the South African national lockdown would have on the South African underground operations, as well as the increase in the short-term gold price, the recoverable amounts for these cash-generating units (CGUs) were calculated. The recoverable amounts for these assets were determined on a fair value less cost to sell basis using assumptions in the discounted cash flow models and attributable resource values. These are fair value measurements classified as level 3.

Estimates and judgements

The recoverable amount of mining assets is determined utilising real discounted future cash flows or resource multiples in the case of undeveloped properties and certain resource bases. During this year's planning and testing, commodity price and exchange rate assumptions as per the table below were used. Due to the increase in the US$ commodity price and weakening of the Rand against the US$ at the end of the financial year, management decided it would be appropriate to differentiate between short-, medium- and long-term assumptions used in the models. The long-term price was determined as part of the annual budgeting process and is used in the life-of-mine plans and is also the cut-off price for calculating reserves included in the declaration of reserves and resources in terms of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC). The resource multiple values are unchanged from the prior year, given the long-term nature of the projects that are valued in this manner.

Post-tax real discount rates ranging between 9.0% and 11.5% (2019: 8.9% and 11.1%), depending on the asset, were used to determine the recoverable amounts.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

8.	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS continued

Impairment of property, plant and equipment (including goodwill) continued

Estimates and judgements continued

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
US$ gold price per ounce
– Year 1		1 610		1 325
– Year 2		1 558		1 310
– Year 3		1 469		1 290
– Long term (year 4 onwards)		1 350		1 290
US$ silver price per ounce
– Year 1 and Year 2		17.00		15.75
– Long term (Year 3 onwards)		17.00		17.00
Exchange rate (R/US$)
– Year 1		16.72		14.43
– Year 2		15.47		14.25
– Year 3		15.29		14.11
– Long term (Year 4 onwards)		14.51		14.11
Exchange rate (PGK/US$)		3.45		3.34
Rand gold price (R/kg)
– Year 1		865 000		615 000
– Year 2		775 000		600 000
– Year 3		722 000		585 000
– Long term (Year 4 onwards)		630 000		585 000
Additional resources multiples US$/oz
Measured		25.00		25.00
Indicated		8.00		8.00
Inferred		2.80		2.80

Due to the volatilities experienced in the markets and the uncertainty in forecasting future cash flows due to the impact of the COVID-19 pandemic, management has used various probability scenarios in determining the recoverable amounts for the CGUs at 30 June 2020.

The following were factored into management's judgements:

•	infection rates and the timing of the expected peaks in the provinces that Harmony's operations are situated in, based on models prepared by the South African government;

•expected disruptions to production together with the mitigation strategies management has in place;

•potential duration of the impact of the virus and the related restrictions in operations; and

•potential changes of the timing of various cash flows due to shortened production breaks.

Management included estimates of the staffing costs for screening and monitoring employees at work as well as those that are in quarantine. The cost estimates also include the accommodation expenses for employees in quarantine or isolation as well as the treatment cost for those with mild symptoms and those with severe symptoms that need to be hospitalised. These estimates were based on actual costs incurred for the period March to June 2020.

In preparing the various scenarios, management considered and varied:

•	the potential impact on production and therefore on the revenue cash flows, based on historical trends that have been extrapolated to account for varying disruption levels;

•the duration of potential disruptions to production, ranging from 12 months to 24 months;

•	the infection rates and associated costs. Where infections were assumed to continue into Year 2, the rate was dependant on the assumed infections in Year 1, with a higher rate in Year 1 resulting in a lower rate in Year 2, and vice versa.

29

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

8.	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS continued

Impairment of property, plant and equipment (including goodwill) continued

Estimates and judgements continued

Management assumed that the production costs would be largely unaffected as employees would either be at work or on sick leave, while the strategy of moving crews around would ensure production carried on without undue disruption and therefore would not impact on costs such as consumables and electricity.

The calculated cash flows were then weighted based on management's expectation of each of the scenarios occurring. The resulting amounts were discounted using the specific discount rate for each operation in order to determine the recoverable amount.

Results of impairment and reversal assessment

Based on the impairment tests performed, no impairments were recorded for the 2020 year. Where CGUs had previously been impaired, management considered whether the impairment loss (or the contributors to the previously recognised impairment loss) no longer exists or might have decreased. Management considered general and specific factors for each CGU and concluded that although overall the gold price had improved from the time that the impairment losses had been recognised, the specific circumstances that led to the original impairments had not reversed.  Management also considered the level of uncertainty of the impact of COVID-19 on production and therefore on the cash flows. Due to the volatility embedded in the potential upside driven by the higher gold prices in the short to medium term, coupled with the fact that the factors resulting in the previously recognised impairment losses had not reversed, management resolved it to be appropriate for no reversal of previously recognised impairment losses to be recorded for the period under review.

Sensitivity analysis

One of the most significant assumptions that influence the life-of-mine plans and therefore impairment assessments is the expected commodity prices. A 10% decrease in the gold price and resource values used (with all other variables held constant) would have resulted in the following impairment being recorded as at 30 June 2020:

		Year ended
		30 June 2020
Figures in million		10% decrease
Tshepong Operations		3 352
Kusasalethu		441
Target 1		804
Joel		716
Bambanani		94
Other Freegold assets		20
Unisel		6
Moab Khotsong		15

Joel operation

At 1 January 2020, management performed an assessment of Joel's Level 137 decline project to determine whether it had reached commercial levels of production. It was considered substantially complete and ready for its intended use as:

•capital expenditure is 98% of project cost estimates

•more than an insignificant amount of gold is being produced in a saleable form and

•the level has the ability to sustain the ongoing production of gold.

The accumulated cost of developing the level (approximately R900 million) was transferred from assets under construction to mining assets within property, plant and equipment. The capitalisation of borrowing costs ceased and depreciation commenced as of 1 January 2020.

Wafi-Golpu development

Capitalisation of certain project expenses on Wafi-Golpu was halted from 1 July 2019 following delays in the permitting of the project. The expenses were for holding purposes and did not result in future economic benefit. These have been included in exploration expenditure in the income statement and amounted to R123 million for the 2020 year.

Management is confident that the permitting process will continue, given the progress to date on the various agreements required for the permitting process and granting of a Special Mining Licence. Key permitting activities are continuing and are fully supported and resourced.

30

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

9.	LEASES

Key judgements applied in determining the right-of-use assets and lease liability were:

•

assessing whether an arrangement contains a lease: factors considered are whether an arrangement includes an identified asset; whether Harmony has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use; whether Harmony has the right to direct the use of the asset; whether Harmony has the right to operate the asset throughout the period of use without the supplier having the right to change operating instructions and whether a service contract includes the implicit right to the majority of the economic benefit from assets used in providing the service;

•

determining the lease term: management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option, such as whether the rates quoted by suppliers are competitive; whether a need still exists for the asset/service obtained from the supplier and whether the supplier is deemed as a reliable contractor. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee. The group applies the considerations for short-term leases where leases are modified to extend the period by 12 months or less on expiry and these modifications are assessed on a standalone basis; and

•	determining the discount rate: in determining the incremental borrowing rates, management considers the term of the lease, the nature of the asset being leased, in country borrowings as well as other sources of finance.

The group leases various assets including buildings, plant, equipment, containers and machinery. The right-of-use assets arising from these leases are included in the property, plant and equipment balance in the consolidated balance sheet. The movement in the right-of-use assets is as follows:

			Year ended
Figures in million			30 June 2020 (Reviewed)
Balance at beginning of the period			—
Impact of adopting IFRS 16 – 1 July 2019			81
Additions			106
Depreciation			(45	)
Terminations			(8	)
Translation			17
Balance at end of the period			151

The non-current and current portions of the lease liability is included in other non-current liabilities and trade and other payables in the consolidated balance sheet respectively. The movement in the lease liabilities is as follows:

			Year ended
Figures in million			30 June 2020 (Reviewed)
Balance at beginning of the period			—
Impact of adopting IFRS 16 – 1 July 2019			81
Additions			93
Interest expense on lease liabilities			8
Lease payments made			(46	)
Terminations			(8	)
Translation			13
Balance at end of the period			141
Current portion of lease liabilities			60
Non-current portion of lease liabilities			81

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

9.	LEASES continued

The maturity of the group's undiscounted lease payments is as follows:

			Year ended
Figures in million			30 June 2020 (Reviewed)
Less than and including one year			67
Between one and five years			86
Five years and more			—
Total			153

Reconciliation between lease commitments as at 30 June 2019 and IFRS 16 lease liability as at 1 July 2019:

			Year ended
Figures in million			30 June 2020 (Reviewed)
Lease commitments as at 30 June 20191			38
Effect of options to extend the lease term			64
Discounting of lease liabilities			(21	)
Impact of adopting IFRS 16 – 1 July 2019			81

1	The lease commitments represent solely payments under non-cancellable periods per the contracts and exclude any options to extend the lease term.

The weighted average incremental borrowing rate at the date of initial application is 9.82% for the South African operations and 5.84% for the International operations.

The amounts included in the income statement relating to leases:

			Year ended
Figures in million			30 June 2020 (Reviewed)
Depreciation of right-of-use assets1			45
Interest expense on lease liabilities2			8
Short-term leases expensed3, 4			96
Leases of low value assets expensed3			19
Variable lease payments expensed3, 5			690

1	Included in depreciation and amortisation.

2	Included in finance costs.

3	Included in production costs and corporate, administration and other expenditure.

4	The amount includes leases that expire within 12 months of adoption as management elected the short-term expedient.

5	These payments relate mostly to mining and drilling contracts. Variable lease payments made comprise 81% of the total lease payments made during the period. The majority of the variable lease payments made relate to the contracting of specialists for mining operations at Harmony's open pit mines and are determined on a per tonne or square metre basis.

10.	TRADE AND OTHER RECEIVABLES AND OTHER NON-CURRENT ASSETS

The balance at 30 June 2020 includes an increase of R175 million in the metals debtor as well as R144 million in the VAT/GST receivable.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

11.	DERIVATIVE FINANCIAL INSTRUMENTS

Figures in million	Rand gold hedging contracts (a)		US$ gold hedging contracts		Other derivative contracts		Total
As at 30 June 2020 (Reviewed)
Derivative financial assets	19		8		41		68
Non-current	10		5		35		50
Current	9		3		6		18
Derivative financial liabilities	(3 626	)	(356	)	(1 021	)	(5 003	)
Non-current	(717	)	(96	)	(66	)	(879	)
Current	(2 909	)	(260	)	(955	)	(4 124	)
Net derivative financial instruments	(3 607	)	(348	)	(980	)	(4 935	)
Unamortised day one net loss included above	18		8		—		26
Unrealised losses included in other reserves, net of tax	3 053		342		—		3 395
Movement for the year ended 30 June 2020
Realised losses included in revenue	(1 263	)	(134	)	—		(1 397	)
Unrealised losses on gold contracts recognised in other comprehensive income	(4 820	)	(391	)	—		(5 211	)
Losses on derivatives	—		—		(1 403	)	(1 403	)
Unrealised losses reclassified to profit or loss as a result of discontinuance of hedge accounting	(235	)	—		—		(235	)
Day one loss amortisation	(34	)	(6	)	—		(40	)
Total losses on derivatives	(269	)	(6	)	(1 403	)	(1 678	)
Hedge effectiveness
Changes in the fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness	(4 820	)	(391	)	—		(5 211	)
Changes in the fair value of the hedged item used as the basis for recognising hedge ineffectiveness	4 820		391		—		5 211

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

11.	DERIVATIVE FINANCIAL INSTRUMENTS continued

Figures in million	Rand gold hedging contracts (a)		US$ gold hedging contracts		Other derivative contracts		Total
As at 30 June 2019 (Audited)
Derivative financial assets	45		5		456		506
Non-current	23		1		173		197
Current	22		4		283		309
Derivative financial liabilities	(321	)	(55	)	(66	)	(442	)
Non-current	(158	)	(14	)	—		(172	)
Current	(163	)	(41	)	(66	)	(270	)
Net derivative financial instruments	(276	)	(50	)	390		64
Unamortised day one net loss included above	36		5		—		41
Unrealised losses included in other reserves, net of tax	165		49		—		214
Movement for the year ended 30 June 2019
Realised gains included in revenue	453		—		—		453
Unrealised losses on gold contracts recognised in other comprehensive income	(302	)	(49	)	—		(351	)
Gains included in gains on derivatives	—		—		516		516
Day one loss amortisation	(31	)	(1	)	—		(32	)
Total gains/(losses) on derivatives	(31	)	(1	)	516		484
Hedge effectiveness
Changes in the fair value of the hedging instrument used as the basis for recognising hedge ineffectiveness	(302	)	(49	)	—		(351	)
Changes in the fair value of the hedged item used as the basis for recognising hedge ineffectiveness	302		49		—		351

Reconciliation of the hedge reserve:

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Opening balance		(214	)	413
Remeasurement of gold hedging contracts		(3 197	)	(627	)
Unrealised gain/(loss) on gold contracts		(5 211	)	(351	)
Unrealised losses reclassified to profit or loss as a result of discontinuance of hedge accounting		235		—
Released to revenue		1 397		(453	)
Foreign exchange translation		(37	)	—
Deferred taxation thereon		419		177
Attributable to non-controlling interest		16		—
Closing balance		(3 395	)	(214	)

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

11.	DERIVATIVE FINANCIAL INSTRUMENTS continued

Hedge accounting

Harmony has entered into gold forward sale derivative contracts to hedge the risk of lower gold prices. Cash flow hedge accounting is applied to the majority of these contracts, resulting in the effective portion of the unrealised gains and losses being recorded in other comprehensive income.

Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective effectiveness assessments. The group enters into gold forward contracts that have similar terms as the hedged item, such as notional amount, maturity date and reference gold spot price thereby ensuring that an economic relationship exists between the hedging instrument and the hedged item and resulting in a hedge ratio of 1:1. Potential sources of hedge ineffectiveness include counterparty and own credit risk, day one gains and losses, a mismatch in the timing of the derivative and underlying gold sale maturities, location differential and the refining margin. Hedge ineffectiveness is measured by comparing the change in the expected cash flows from a forward sale contract versus the sale of an equivalent quantity of gold in the open market. Ineffectiveness results when the changes in the fair values in the hedging instruments exceed the fair value changes in the hedged item. A negligible amount of ineffectiveness was experienced during the years presented.

The gains and losses from derivative contracts to which hedge accounting are not applied are included in gains/(losses) on derivatives.

(a)	Rand gold contracts

Discontinuance of hedge accounting

As a result of the original 21-day lockdown announced in South Africa, effective 27 March 2020, aimed to slow the spread of COVID-19, Harmony closed all deep-level underground mines in South Africa. As a result of the closure, a significant volume of the underlying exposure that was originally intended to be hedged was delayed.

A total of 63 400 ounces of gold forwards were originally set to mature in the months of April and May 2020. After assessing forecasts of gold production at 1 April 2020, the hedged items, being the sales of gold, relating to 30 500 ounces of gold forwards were assessed to no longer be probable. The hedged items relating to the remaining balance of gold forwards were still considered to be highly probable.

Due to the fact that the occurrence of the forecast transactions/hedged items were no longer considered probable, there was no longer an effective hedging relationship and therefore hedge accounting for these hedges was discontinued. Unrealised losses relating to these hedges amounting to R48 million and R187 million of restructured contracts discussed below, previously recognised in other comprehensive income, were immediately reclassified to profit or loss and disclosed under gains/losses on derivatives.

Restructuring of contracts

In response to the gold forwards’ hedged items no longer being probable and in order to better match the cash flows relating to the underlying exposure, certain of the Rand gold forwards with maturities between 15 April 2020 and 31 May 2020 were effectively extended to mature between the periods July 2020 and March 2021.

The restructured gold forwards retained the pricing of the original forwards. They were not designated as hedging instruments as the difference in the costing structure would have required a different effectiveness assessment than currently used by management. Unrealised losses relating to the hedges amounting to R187 million, previously recognised in other comprehensive income, were immediately reclassified to profit or loss and disclosed under gains/losses on derivatives. All future gains and losses on the restructured hedges will be recognised in profit or loss. These contracts are included in Other derivative contracts.

Subsequently, losses of R70 million have been recognised in profit and loss.

35

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

11.	DERIVATIVE FINANCIAL INSTRUMENTS continued

The following table shows the open position at the reporting date:

	FY 2021								FY2022								TOTAL
	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4
Foreign exchange contracts
Zero cost collars
US$m	116		115		99		65		47		42		27		—		511
Average Floor	15.36		15.4		15.44		15.91		16.32		16.93		17.99		—		15.81
Average Cap	16.45		16.58		16.62		17.28		17.9		18.54		19.65		—		17.09
Forward contracts
US$m	66		44		35		12		9		9		8		—		183
Average Forward rate	15.83		15.82		16.13		16.93		18.18		18.41		18.71		—		16.38
R/gold
'000 oz - restructured	8		8		8		—		—		—		—		—		24
'000 oz - cash flow hedge	80		78		77		71		61		44		25		10		446
Average R'000/kg	673		679		691		737		806		851		950		1037		743
US$/gold
'000 oz - cash flow hedge	12		12		12		12		12		12		10		5		87
Average US$/oz	1 413		1 442		1 489		1 521		1 561		1 606		1 710		1 760		1 543
Total gold
'000 oz	100		98		97		83		73		56		35		15		557
US$/silver
'000 oz	360		340		300		270		230		90		10		—		1600
Average Floor	17.47		17.87		18.01		18.17		18.21		17.86		18.40		—		17.91
Average Cap	18.92		19.37		19.50		19.70		19.75		19.44		20.15		—		19.41

Refer to note 18 for details on the fair value measurements.

12.	INVENTORIES

The consumables’ balance increased R298 million year on year, primarily as a result of the impact of the weakening of the Rand against the Australian dollar from R9.91/A$1 at 30 June 2019 to R11.96/A$1 at 30 June 2020 and the resultant movement when translating the balance for the Hidden Valley operations at year-end.

The run-of-mine (ROM) stock at the Hidden Valley operations increased by R294 million year on year following the commencement of the stage 6 cut-back. The increase includes approximately R72 million which is attributable to translation.

13.	PROVISION FOR ENVIRONMENTAL REHABILITATION

The balance at 30 June 2020 increased by R354 million, of which R208 million relates to the translation of the balance related to Hidden Valley. The remaining increase relates to the unwinding of the time value of money due to the passage of time.

14.	PROVISION FOR SILICOSIS SETTLEMENT

On 26 July 2019, the Johannesburg High Court approved the R5.2 billion settlement of the silicosis and tuberculosis class action suit between the Occupational Lung Disease Working Group – representing Harmony, Gold Fields, African Rainbow Minerals, Anglo American SA, AngloGold Ashanti and Sibanye-Stillwater – and lawyers representing affected mineworkers. The mandatory three-month period, during which potential beneficiaries could opt out of the settlement agreement, is completed and the Tshiamiso Trust has been set up to track and trace class members, process all submitted claims, including the undertaking of medical examinations, and pay benefits to eligible claimants.

Harmony has provided for the estimated cost of the settlement based on actuarial assessments. At 30 June 2020, management estimated Harmony's share as R892 million (pre-tax). The time value of money recognised for the year ended 30 June 2020 is R69 million and the change in estimate is a loss of R36 million caused by changes in the interest rate assumptions.

Payments to the trust set up to administer the settlement during the 2020 year amounted to R155 million, which included benefit contributions. A portion of the provision has been transferred to current liabilities.

36

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

15.	BORROWINGS

During the year ended 30 June 2020:

•	On 26 September 2019, Harmony and a syndicate of local and international lenders, which was jointly arranged by Nedbank Limited and ABSA Bank Limited, concluded a new US$400 million facility, replacing the previous US$350 million facility. The tenure of three years can be extended by another one year. The key terms and conditions of the facility are included in the table below.

•	As part of the facility, the tangible net worth to net debt covenant was set to at least 4 times and the same ratio was applied to all other facilities.

•	An amount of US$295 million (R4 465 million) was repaid on the old facility, while US$300 million (R4 541 million) was drawn down on the new facility during October 2019.

•	In order to ensure liquidity during the South African national lockdown, a further US$50 million (R900 million) was drawn down on the US$400 million facility during the June 2020 quarter.

•	R1 100 million was drawn down and R1 100 million was repaid on the R2 billion facility.

•	Harmony repaid US$6 million (R95 million) on the Hidden Valley Westpac Bank loan.

•	During the June 2020 quarter, lenders agreed to relax the tangible net worth to net debt covenant from 4 times to 2 times until December 2020, in order to provide flexibility to the group following the disruptions from the COVID-19 pandemic.

•	Harmony concluded a bridge loan facility of US$200 million with a syndicate of lenders on 16 June 2020 in order to fund the acquisition of assets from AngloGold Ashanti Limited (refer to note 17 for further details). The terms and conditions of the facility are as follows:

Facility:	US$200 million
Maturity date:	June 2021
Interest rate:	LIBOR + 1.80% for the first 6 months
	LIBOR + 2.40% for the next 3 months
	LIBOR + 3.00% for the last 3 months

No draw-down had been done on the loan at 30 June 2020. Refer to note 24 for details of the cancellation after year-end.

There were no breaches of the loan covenants for the 2020 and 2019 financial years.

Refer to note 24 for events subsequent to the reporting date.

Figures in million	US$ term loan US dollar		US$ RCF US dollar		Rand term loan SA rand		Rand RCF SA rand		Westpac fleet loan US dollar
Borrowings summary at 30 June 2020
Original facility	200		200		600		1 400		N/A
Drawn down/ loan balance	200		150		600		900		14
Undrawn committed borrowing facilities	N/A		50		N/A		500		N/A
Maturity	September		September		November		November		July
	2023		2023		2022		2022		2022
Interest rate	LIBOR + 3.05%		LIBOR + 2.90%		JIBAR + 2.90%		JIBAR + 2.80%		LIBOR + 3.20%

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Translation loss on US$ facilities		(967	)	(99	)
Rand/US$ exchange rate:
Closing/spot		17.32		14.13
Average		15.66		14.18

37

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

16.	NON-CONTROLLING INTEREST

In 2013 Harmony entered into a transaction to fund an empowerment transaction to sell 25% of its Phoenix operation (now Tswelopele Beneficiation Operation(TBO)) to Black Economic Empowerment (BEE) shareholders. The transaction was accounted for as an in-substance option as the BEE shareholders would only share in the upside of their equity interest in TBO until the date the loans provided by Harmony were fully repaid.

Effective 31 December 2019, the BEE shareholder loans were repaid in full and the option is deemed to have been exercised. The portion of the BEE shareholders' interest in TBO was measured at the net asset value of negative R5 million and reclassified to non-controlling interest on this date. On initial recognition, TBO's negative net asset value of R5 million consists of accumulated profits of R222 million and a historic debit common control reserve of R250 million.

The total comprehensive income attributable to the BEE shareholders allocated to non-controlling interest for the six months ended 30 June 2020 was R12 million and includes a portion of the unrealised loss from the hedges in other reserves. A dividend was declared by TBO on 5 March 2020 and the portion to non-controlling interests amounted to R3 million.

17.	ACQUISITION OF ANGLOGOLD ASHANTI'S REMAINING SOUTH AFRICAN ASSETS

Transaction

On 12 February 2020, Harmony announced that it had reached an agreement with AngloGold Ashanti Limited (AGA) to purchase AGA's remaining South African producing assets and related liabilities. The transaction includes the following assets and liabilities:

•	The Mponeng mine and its associated assets and liabilities;

•	The Tau Tona and Savuka mines and associated rock-dump and tailings storage facility reclamation sites, mine rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities;

•	First Uranium (Pty) Limited which owns Mine Waste Solutions (Pty) Limited and Chemwes (Pty) Limited as well as associated tailings assets and liabilities (the FUSA Group);

•	Covalent Water Company (Pty) Limited (CWC), AngloGold Security Services (Pty) Limited and Masakhisane Investments (Pty) Limited; and

•	Certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal River region and their associated assets and liabilities (the VR Remaining assets).

Consideration for the transaction is a cash payment of US$200 million, due on the closing date, and contingent consideration subject to the following criteria:

•	US$260 per ounce payable on all underground production from the Mponeng, Savuka and Tau Tona mines in excess of 250 000 ounces per year for six years commencing 1 January 2021. Based on AGA's current production forecast, this was estimated at approximately US$100 million at the time that the deal was announced; and

•	US$20 per ounce payable on underground production from the Mponeng, Savuka and Tau Tona mines sourced from levels developed in the future below the current infrastructure.

The agreement is subject to certain conditions precedent. Refer to note 24.

Funding of acquisition consideration through debt and shares

Harmony concluded a bridge loan to fund the acquisition consideration. Refer to note 15 and note 24 for further detail.

As part of the funding strategy, Harmony approached its shareholders for authorisation to issue shares up to US$200 million to fund the acquisition consideration through:

•	a general authority to issue ordinary shares for cash, subject to the restrictions set out in the JSE Listings Requirements including that only public shareholders may participate;

•	a vendor consideration placement as set out in the JSE Listings Requirements, which would enable non-public shareholders to participate subject to certain conditions;

•	or a combination of the above.

An Extraordinary General Meeting was held on 11 June 2020 and the requisite majority of the shareholders approved all of the ordinary and special resolutions. Following this, on 24 June 2020 Harmony successfully completed the share placement of 60 278 260 new ordinary shares in Harmony with existing and new institutional investors at a price of R57.50 per share, raising the proceeds of US$200 million (R3 466 million). The shares issued represented, in aggregate, approximately 11.1% of Harmony’s issued ordinary share capital before the placing. The placing price represented a discount of 5.4% to the closing share price on 24 June 2020 and a 3.5% discount to the 30-day volume-weighted average price (VWAP). The shares were issued on 30 June 2020 and the proceeds were received on the same day. The share issue costs amounted to R80 million.

38

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

17.	ACQUISITION OF ANGLOGOLD ASHANTI'S REMAINING SOUTH AFRICAN ASSETS continued

Acquisition and integration costs

In anticipation of the transaction, Harmony has incurred various costs directly attributable to the acquisition process. These costs include attorney and advisory fees as well as costs related to the bridge loan. The acquisition costs are shown as a separate line in the income statement.

There have also been costs incurred in preparation for the integration of the acquired assets into Harmony's existing structures and systems. These costs include project management and consultancy fees, software licensing costs and the purchase of certain equipment required to interface with the Harmony systems. These costs amount to R4 million for the 2020 year and have been included in Corporate, administration and other expenditure.

Accounting considerations

Management has performed an initial assessment of the assets to be acquired and has determined that they meet the definition of a business per IFRS 3, Business Combinations (as amended and applicable to Harmony from 1 July 2020).

Following the fulfilment of the conditions precedent, management will begin with a purchase price allocation in accordance with the requirements of IFRS 3 for the business combinations. The process is expected to take several months to complete.

Subsequent events

Refer to note 24 for developments after the reporting date.

18.	FINANCIAL RISK MANAGEMENT ACTIVITIES

Since March 2020, the COVID-19 pandemic has impacted on various aspects of Harmony's operating environment. Where relevant, reference is made to certain impacts in the discussions below, however a detailed discussion thereof is included in note 2.

Foreign exchange risk

Harmony's revenues are sensitive to the R/US$ exchange rate as all revenues are generated by gold sales denominated in US$. A weakening of the Rand will increase the reported revenue total; conversely a strengthening will decrease it.

Harmony maintains a foreign currency derivative programme to manage foreign exchange risk. The limit currently set by the Board is 25% of the group's foreign exchange risk exposure for a period of 24 months. The audit and risk committee reviews the details of the programme quarterly. Refer to note 11 and the fair value determination section below for further detail on these contracts.

The Rand has weakened significantly during the 2020 year, especially during the June 2020 quarter as a result of the COVID-19 pandemic, closing at R17.32/US$1 on 30 June 2020 (2019: R14.13/US$1). This negatively impacted on the valuation of contracts that matured during the quarter and that were outstanding at 30 June 2020. However Harmony continues to enjoy favourable foreign exchange pricing on the uncovered portion of its exposure, while simultaneously locking-in the current higher prices as part of its derivative programme.

The Rand's levels also impacted negatively on the translation of the US$ debt facilities at 30 June 2020. Refer to note 15 for detail. Translation of the International net assets was impacted by a similar weakening of the Rand against the Australian dollar from R9.91/A$1 at 30 June 2019 to R11.96/A$1. A gain of R1.2 billion has been recognised in other comprehensive income.

Commodity price sensitivity

The profitability of the group’s operations, and the cash flows generated by those operations, are mainly affected by changes in the market price of gold, and in the case of Hidden Valley, silver as well. Harmony entered into derivative contracts to manage the variability in cash flows from the group’s production, in order to create cash certainty and protect the group against lower commodity prices. The general limit for gold hedging currently set by the Board is 20% for a 24-month period. The limit set by the Board is 50% of silver exposure over a 24-month period. The audit and risk committee reviews the details of the programme quarterly.

Refer to note 11 and the fair value determination section below for further detail on these contracts.

Due to the COVID-19 pandemic, markets experienced extreme volatility in the last four months of the 2020 financial year. As a result of the heightened risk globally, the price of gold in US$ terms increased significantly over the period with the spot price increasing by 26% year on year. This increase, together with the weakening of the Rand discussed above, had a negative impact on the contracts that matured during the June 2020 quarter as well as those that were outstanding at 30 June 2020. However Harmony continues to enjoy favourable commodity and foreign exchange pricing on the unhedged portion of its exposure, while simultaneously locking-in the current higher prices as part of its hedging programme.

Interest rate risk

The interest rate cuts by both the US Federal Reserve and the SARB had a favourable impact on the cost of debt during the year. This was offset by the weakening of the Rand on the cost for the US$ facilities, as well as the increased debt levels, especially in the last quarter, as discussed in Capital Risk Management below.

39

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

18.	FINANCIAL RISK MANAGEMENT ACTIVITIES continued

Credit risk

Financial instruments which are subject to credit risk are restricted cash, restricted investments, derivative financial instruments and cash and cash equivalents, all of which are invested with financial institutions that meet the group's policy requirements for credit quality, as well as trade and other receivables (excluding non-financial instruments). In assessing the creditworthiness of local institutions, management uses the national scale long-term ratings.

Predominantly as a result of the global COVID-19 pandemic, on 27 March 2020, Moody's Investor Service downgraded the South African government's long-term foreign currency and local currency issuer ratings to Ba1 from Baa3, which is a sub-investment grade rating. The country’s sovereign downgrade prompted a re-rating of the five major banks’ international credit ratings as the local banks cannot have a rating higher than the sovereign country’s.

Furthermore, on 31 March 2020, Fitch Ratings (Fitch) downgraded South Africa’s five major banks citing an adverse impact (driven by the virus) on the banks' operating environment and key financial metrics, notwithstanding any uncertainty on the full economic and financial market implications.

Taking the above events into consideration, the effects of COVID-19 have resulted in the credit ratings of financial institutions dropping by a notch, however, the local national scale investment grade rating of these banks is still high, between A+ and AA, and in line with the group's credit risk policy. An assessment of the expected credit losses (ECLs) for the financial assets measured at amortised costs at 30 June 2020 resulted in an immaterial amount for each instrument, in line with the assessment performed in 2019. The downgrade therefore had an immaterial effect on these financial instruments.

Management will continue to review the underlying strength of the South African economy as well as the creditworthiness of the financial institutions during this uncertain time and make any changes deemed necessary to safeguard the assets and reduce the credit risk.

Capital risk management

On 30 June 2020 the group received R3 466 million, through an equity raise, in order to fund the acquisition of AGA's remaining South African assets (refer to note 17). This capital injection has in part attributed to the increase in cash reserves and the consequential decline in the net debt balance.

Harmony drew down additional funds from its debt facilities to sustain ordinary operations and resist any detrimental impacts of COVID-19, resulting in an increase in borrowings (refer to note 15). The levels in Rand terms were also impacted by the translation impact following the weakening of the Rand. It is the group's objective to adhere to a conservative approach to debt and maintain low levels of gearing.

Net debt is as follows:

		At
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Cash and cash equivalents		6 357		993
Borrowings		(7 718	)	(5 915	)
Net debt		(1 361	)	(4 922	)

40

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

18.	FINANCIAL RISK MANAGEMENT ACTIVITIES continued

Fair value determination

The fair value levels of hierarchy are as follows:

Level 1:	Quoted prices (unadjusted) in active markets
Level 2:	Inputs other than quoted prices included within level 1 that are observable for the asset, either directly or indirectly (that is, as prices) or indirectly (that is derived from prices);
Level 3:	Inputs for the asset that are not based on observable market data (that is unobservable inputs).

		At
Figures in million	Fair value hierarchy level	30 June 2020 (Reviewed)		30 June 2019 (Audited)
Fair value through other comprehensive income financial instruments
Other non-current assets	Level 3	77		59
Fair value through profit or loss financial instruments
Restricted investments1	Level 2	837		1 256
Derivative financial assets2	Level 2	68		506
Derivative financial liabilities2	Level 2	(5 003	)	(442	)
Loan to ARM BBEE Trust3	Level 3	306		271

1	The majority of the balance is directly derived from the Top 40 index on the JSE, and is discounted at market interest rates. This relates to equity linked deposits in the group's environmental rehabilitation trust funds. The balance of the environmental trust funds are carried at amortised cost and therefore not disclosed here.

2	The mark-to market remeasurement of the following contracts is derived from:

•

Forex exchange contracts (zero cost collars): a Black-Scholes valuation technique, derived from spot rand/US$ exchange rate inputs, implied volatilities on the rand/US$ exchange rate, rand/US$ inter-bank interest rates and discounted at market interest rate (zero-coupon interest rate curve). FECs are derived from the forward rand/US$ exchange rate and discounted at market interest rate (zero-coupon interest rate curve).

•	Rand gold contracts (forward sale contracts): spot rand/US$ exchange rate, rand and dollar interest rates (forward points), spot US$ gold price, differential between the US interest rate and gold lease interest rate which is discounted at market interest rate.

•	US$ gold contracts (forward sale contracts): spot US$ gold price, differential between the US interest rate and gold lease interest rate and discounted at market interest rate.

•	Silver contracts (zero cost collars): a Black-Scholes valuation technique, derived from spot US$ silver price, strike price, implied volatilities, time to maturity and interest rates and discounted at market interest rate.

3	The fair value was calculated using a discounted cash flow model taking into account projected interest payments and the projected share price for African Rainbow Minerals Limited (ARM) on the expected repayment date. A 10% change in the unobservable inputs would not cause a material change to the fair value of the loan.

For all other financial instruments, fair value approximates carrying value.

19.	ADDITIONAL CASH FLOW DISCLOSURES

(a)	Restricted investments

During March 2019, the Group withdrew R183 million from its rehabilitation trusts for the reimbursement of rehabilitation work that was completed in prior years. There were no withdrawals during the June 2020 financial year.

(b)	Additions to property, plant and equipment

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Capital expenditure – operations		2 881		3,490
Capital and capitalised exploration and evaluation expenditure for Wafi-Golpu1		54		350
Additions resulting from stripping activities		675		1,196
Total additions to property, plant and equipment		3 610		5,036

¹ Refer to note 8 for detail on the Wafi-Golpu project.

41

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

20.	COMMITMENTS AND CONTINGENCIES

		At
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Capital expenditure commitments:
Contracts for capital expenditure		368		418
Authorised by the directors but not contracted for		1 314		1,499
Total capital commitments		1 682		1,917

This expenditure will be financed from existing resources and, where appropriate, borrowings.

Contingent liabilities

There were no significant changes during the 2020 financial year. For a detailed disclosure on contingent liabilities refer to Harmony's annual financial statements for the financial year ended 30 June 2019.

21.	RELATED PARTIES

Name of director/prescribed officer	Shares purchased in open market		Shares sold in open market		Performance shares vested and retained
Harry 'Mashego 'Mashego (Executive Director)	—		593		—

In January 2020, Harmony announced the appointment of Ms Boipelo Lekubo as financial director of the company, effective 3 March 2020. Mr Frank Abbott, Harmony’s long-serving financial director, remains on the board as an executive director and assumed responsibility for business development, effective from 3 March 2020.

Refer to note 24 for changes after the reporting date.

22.	SEGMENT REPORT

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM).

The segment report follows on page 44.

23.	RECONCILIATION OF SEGMENT INFORMATION

		Year ended
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Reconciliation of production profit to gross profit/(loss)
Revenue		29 245		26 912
– Per segment report		28 307		26 146
– Other metal sales treated as by-product credits in the segment report		938		766
Production costs		(22 048	)	(20 324	)
– Per segment report		(21 110	)	(19 558	)
– Other metal sales treated as by-product credits in the segment report		(938	)	(766	)
Production profit per segment report		7 197		6 588
Impairment of assets		—		(3 898	)
Amortisation and depreciation		(3 508	)	(4 054	)
Other cost of sales items		(352	)	(593	)
Gross profit/(loss) as per income statement1		3 337		(1 957	)

1	The reconciliation was done up to the first recognisable line item on the income statement. The reconciliation will follow the income statement after that.

42

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2020 (RAND)

23.	RECONCILIATION OF SEGMENT INFORMATION continued

		At
Figures in million		30 June 2020 (Reviewed)		30 June 2019 (Audited)
Reconciliation of total segment mining assets to consolidated property, plant and equipment
Property, plant and equipment not allocated to a segment
Mining assets		331		341
Undeveloped property		3 681		3 681
Other non-mining assets		115		115
Wafi-Golpu assets		2 989		2 467
		7 116		6 604

24.	SUBSEQUENT EVENTS

(a)	On 6 July 2020 Harmony and its subsidiaries cancelled the bridge loan of US$200 million (refer to note 15). The cancellation followed the successful equity raise on 24 June 2020 (refer to note 17).

(b)	On 6 July 2020 a payment of R300 million was made on the R2 billion facility while two payments of US$20 million each was made on 2 July 2020 (R340 million) and 8 July 2020 (R339 million) respectively on the US$400 million facility.

(c)	The syndicate of lenders for the US$400 facility agreed to the one year extension during July 2020, extending the maturity date to September 2023.

(d)	On 14 August 2020, Ms Shela Mohatla was appointed as Group Company Secretary by the board of directors. At the same time Mrs Marian van der Walt was appointed as Senior Group Executive: Enterprise Risk and Investor Relations and will be regarded as a prescribed officer going forward.

(e)	By 1 September 2020, Harmony had completed the recall of all operational employees that could safely return to work.

(f)	The last condition precedent for the acquisition of AGA's remaining South African assets (refer note 17 for further detail) was fulfilled during September 2020. Management is busy with the completion of the final steps in the process, which includes payment of the cash consideration prior to the effective date, which is expected to be 1 October 2020.

Following the effective date, management will start with a purchase price allocation process in accordance with IFRS 3, Business Combinations. An updated life-of-mine plan will be prepared for the various operations that have been acquired.

43

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SEGMENT REPORT (RAND/METRIC)

FOR THE YEAR ENDED 30 JUNE 2020 (REVIEWED)

	Revenue				Production cost				Production profit/(loss)				Mining assets				Capital expenditure#				Kilograms produced*				Tonnes milled*
	30 June				30 June				30 June				30 June				30 June				30 June				30 June
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
	R million				R million				R million				R million				R million				kg				t'000
South Africa Underground
Tshepong Operations	5 452		4 685		4 298		3 973		1 154		712		6 733		6 297		930		1 130		7 293		7 967		1 417		1 612
Moab Khotsong	5 008		4 470		3 344		3 101		1 664		1 369		3 842		3 634		498		559		6 592		7 928		746		970
Bambanani	1 591		1 477		1 040		994		551		483		443		562		50		61		2 132		2 515		200		230
Joel	1 037		957		1 010		971		27		(14	)	1 080		947		151		187		1 391		1 567		349		429
Doornkop	2 270		1 931		1 730		1 564		540		367		2 841		2 759		281		308		2 994		3 273		681		730
Target 1	1 524		1 585		1 499		1 491		25		94		1 276		1 076		347		297		2 244		2 653		543		588
Kusasalethu	2 293		2 975		2 577		2 395		(284	)	580		1 253		1 300		188		316		3 015		4 989		615		742
Masimong	1 401		1 359		1 258		1 205		143		154		41		106		24		109		1 999		2 309		489		602
Unisel	681		713		580		564		101		149		6		46		7		45		982		1 212		219		256
Surface
All other surface operations	3 302		2 403		2 135		1 938		1 167		465		745		724		118		84		4 349		4 099		16 264		15 931
Total South Africa	24 559		22 555		19 471		18 196		5 088		4 359		18 260		17 451		2 594		3 096		32 991		38 512		21 523		22 090
International
Hidden Valley	3 748		3 591		1 639		1 362		2 109		2 229		3 810		3 694		959		1 591		4 872		6 222		3 906		3 886
Total international	3 748		3 591		1 639		1 362		2 109		2 229		3 810		3 694		959		1 591		4 872		6 222		3 906		3 886
Total operations	28 307		26 146		21 110		19 558		7 197		6 588		22 070		21 145		3 553		4 687		37 863		44 734		25 429		25 976
Reconciliation of the segment information to the consolidated income statement and balance sheet (refer to note 23)	938		766		938		766		—		—		7 116		6 604
	29 245		26 912		22 048		20 324		7 197		6 588		29 186		27 749		3 553		4 687		37 863		44 734		25 429		25 976

#	Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of R54 million (2019: R350 million).

*	Production statistics are unaudited and not reviewed.

44

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CONDENSED CONSOLIDATED INCOME STATEMENT (US$)

(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)

		Year ended
Figures in million		30 June 2020		30 June 2019
Revenue		1 867		1 898
Cost of sales		(1 655	)	(2 037	)
Production costs		(1 409	)	(1 433	)
Amortisation and depreciation		(224	)	(286	)
Impairment of assets		—		(276	)
Other items		(22	)	(42	)
Gross profit/(loss)		212		(139	)
Corporate, administration and other expenditure		(39	)	(52	)
Exploration expenditure		(13	)	(10	)
Gains/(losses) on derivatives		(107	)	34
Other operating expenses		(77	)	(13	)
Operating loss		(24	)	(180	)
Share of profits from associates		6		4
Acquisition costs		(3	)	—
Investment income		24		22
Finance costs		(42	)	(41	)
Loss before taxation		(39	)	(195	)
Taxation		(17	)	10
Current taxation		(4	)	(10	)
Deferred taxation		(13	)	20
Net loss for the year		(56	)	(185	)
Attributable to:
Non-controlling interest		2		—
Owners of the parent		(58	)	(185	)
Loss per ordinary share (cents)
Basic loss		(10	)	(35	)
Diluted loss		(11	)	(36	)

The currency conversion average rates for the 12 months ended 30 June 2020: US$1 = R15.66 (30 June 2019: US$1 = R14.18).

Note on convenience translations The requirements of IAS 21 The Effects of the Changes in Foreign Exchange Rates have not necessarily been applied in the translation of the US Dollar financial statements presented on page 45 to 49.

45

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (US$)

(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)

		Year ended
Figures in million		30 June 2020		30 June 2019
Net loss for the year		(56	)	(185	)
Other comprehensive income for the year, net of income tax		(124	)	(48	)
Items that may be reclassified subsequently to profit or loss:		(127	)	(48	)
Foreign exchange translation gain/(loss)		77		(4	)
Remeasurement of gold hedging contracts		(204	)	(44	)
Items that will not be reclassified to profit or loss:		3		—
Gain on assets measured at fair value through other comprehensive income		2		—
Remeasurement of retirement benefit obligation
Actuarial gain recognised during the year		1		—
Deferred taxation thereon		—		—
Total comprehensive income for the year		(180	)	(233	)
Attributable to:
Non-controlling interest		—		—
Owners of the parent		(180	)	(233	)

The currency conversion average rates for the 12 months ended 30 June 2020: US$1 = R15.66 (30 June 2019: US$1 = R14.18).

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (US$)

FOR THE YEAR ENDED 30 JUNE 2020 (CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)

Figures in million		Share capital		Accumulated loss		Other reserves		Non-controlling interest		Total
Balance – 1 July 2019		1 707		(675	)	275		—		1 307
Issue of shares		195		—		—		—		195
Share-based payments		—		—		11		—		11
Recognition of non-controlling interest		—		—		—		—		—
Net profit/(loss) for the year		—		(51	)	—		2		(49	)
Other comprehensive income for the year		—		—		(112	)	(2	)	(114	)
Balance – 30 June 2020		1 902		(726	)	174		—		1 350
Balance – 1 July 2018		2 076		(644	)	370		—		1 802
Issue of shares		15		—		—		—		15
Share-based payments		—		—		16		—		16
Net loss for the year		—		(185	)	—		—		(185	)
Other comprehensive income for the year		—		—		(48	)	—		(48	)
Balance – 30 June 2019		2 091		(829	)	338		—		1 600

The currency conversion closing rates for the year ended 30 June 2020: US$1 = R17.32 (30 June 2019: US$1 = R14.13).

46

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CONDENSED CONSOLIDATED BALANCE SHEET (US$)

(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)

		At
Figures in million		30 June 2020		30 June 2019
ASSETS
Non-current assets
Property, plant and equipment		1 685		1 964
Intangible assets		31		38
Restricted cash		5		6
Restricted investments		204		234
Investments in associates		8		8
Inventories		3		3
Deferred tax assets		31		—
Other non-current assets		22		24
Derivative financial assets		3		14
Total non-current assets		1 992		2 291
Current assets
Inventories		140		139
Restricted cash		4		3
Trade and other receivables		75		75
Derivative financial assets		1		22
Cash and cash equivalents		367		70
Total current assets		587		309
Total assets		2 579		2 600
EQUITY AND LIABILITIES
Share capital and reserves
Attributable to equity holders of the parent company		1 350		1 600
Share capital		1 902		2 091
Other reserves		174		338
Accumulated loss		(726	)	(829	)
Non-controlling interest		—		—
Total equity		1 350		1 600
Non-current liabilities
Deferred tax liabilities		58		49
Provision for environmental rehabilitation		197		216
Provision for silicosis settlement		41		67
Retirement benefit obligation		11		14
Borrowings		431		413
Other non-current liabilities		6		—
Derivative financial liabilities		51		12
Total non-current liabilities		795		771
Current liabilities
Provision for silicosis settlement		10		—
Borrowings		15		6
Trade and other payables		171		204
Derivative financial liabilities		238		19
Total current liabilities		434		229
Total equity and liabilities		2 579		2 600

The balance sheet for 30 June 2020 converted at a conversion rate of US$1 = R17.32 (30 June 2019: US$1 = R14.13)

47

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CONDENSED CONSOLIDATED CASH FLOW STATEMENT (US$)

(CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)

		Year ended
Figures in million		30 June 2020		30 June 2019
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated by operations		321		356
Interest and dividends received		5		5
Interest paid		(24	)	(27	)
Income and mining taxes paid		(2	)	(4	)
Cash generated from operating activities		300		330
CASH FLOW FROM INVESTING ACTIVITIES
Increase in restricted cash		(1	)	(1	)
Decrease in amounts invested in restricted investments		—		13
Redemption of preference shares from associates		4		2
Capital distributions from investments		—		2
Additions to property, plant and equipment		(230	)	(355	)
Cash utilised by investing activities		(227	)	(339	)
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings raised		418		107
Borrowings repaid		(361	)	(95	)
Proceeds from the issue of shares		200		15
Lease payments		(2	)	—
Cash generated from financing activities		255		27
Foreign currency translation adjustments		(31	)	1
Net increase in cash and cash equivalents		297		19
Cash and cash equivalents – beginning of year		70		51
Cash and cash equivalents – end of year		367		70

The currency conversion average rates for the 12 months ended 30 June 2020: US$1 = R15.66 (30 June 2019: US$1 = R14.18).

The closing balance translated at closing rate of 30 June 2020: US$1 = R17.32 (30 June 2019: US$1 = R14.13).

48

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SEGMENT REPORT (US$/IMPERIAL)

FOR THE YEAR ENDED 30 JUNE 2020 (CONVENIENCE TRANSLATION) (UNAUDITED AND UNREVIEWED)

	Revenue				Production cost				Production profit/(loss)				Mining assets				Capital expenditure#				Ounces produced*				Tons milled*
	30 June				30 June				30 June				30 June				30 June				30 June				30 June
	2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019		2020		2019
	US$ million				US$ million				US$ million				US$ million				US$ million				oz				t'000
South Africa Underground
Tshepong Operations	348		330		274		280		74		50		389		446		59		80		234 475		256 146		1 562		1 777
Moab Khotsong	320		315		213		219		107		96		222		257		32		39		211 938		254 891		822		1 069
Bambanani	102		104		66		70		36		34		26		40		3		4		68 545		80 860		221		254
Joel	66		67		64		69		2		(2	)	62		67		10		13		44 722		50 379		384		473
Doornkop	145		136		110		110		35		26		164		195		18		22		96 259		105 229		750		805
Target 1	97		112		96		105		1		7		74		76		22		21		72 146		85 296		598		650
Kusasalethu	146		210		165		169		(19	)	41		72		92		12		22		96 934		160 400		678		817
Masimong	89		96		80		85		9		11		2		8		2		8		64 269		74 237		539		664
Unisel	43		50		37		40		6		10		—		3		—		3		31 573		38 966		242		283
Surface
All other surface operations	212		171		138		136		74		35		43		52		8		7		139 823		131 785		17 935		17 565
Total South Africa	1 568		1 591		1 243		1 283		325		308		1 054		1 236		166		219		1 060 684		1 238 189		23 731		24 357
International
Hidden Valley	239		253		105		96		134		157		220		262		61		112		156 639		200 042		4 307		4 285
Total international	239		253		105		96		134		157		220		262		61		112		156 639		200 042		4 307		4 285
Total operations	1 807		1 844		1 348		1 379		459		465		1 274		1 498		227		331		1 217 323		1 438 231		28 038		28 642

^# Capital expenditure for international operations excludes expenditure spent on Wafi-Golpu of US$3 million (2019: US$25 million).

* Production statistics are unaudited and not reviewed.

49

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DEVELOPMENT RESULTS

FOR THE YEAR ENDED 30 JUNE 2020

METRIC

			CHANNEL
	Reef	Sampled	Width	Value	Gold
	Meters	Meters	(Cm's)	(g/t)	(Cmg/t)
Tshepong
Basal	1 777	1 520	10.34	182.18	1 884
B Reef	204	192	137.80	9.03	1 244
All Reefs	1 981	1 712	24.64	73.56	1 812
Phakisa
Basal	1 150	1 145	38.17	36.01	1 374
All Reefs	1 150	1 145	38.17	36.01	1 374
Bambanani
Basal	0	0	0.00	0.00	0
All Reefs	0	0	0.00	0.00	0
Doornkop
South Reef	1 474	1 572	59.30	23.05	1 367
All Reefs	1 474	1 572	59.30	23.05	1 367
Kusasalethu
VCR Reef	1 023	945	83.74	17.33	1 451
All Reefs	1 023	945	83.74	17.33	1 451
Target 1
Elsburg	70	44	250.36	12.83	3 213
All Reefs	70	44	250.36	12.83	3 213
Masimong 5
Basal	762	548	85.82	13.98	1 200
B Reef	731	761	104.39	18.71	1 953
All Reefs	1 493	1 309	96.62	16.95	1 638
Unisel
Basal	443	312	140.92	9.48	1 335
All Reefs	443	312	140.92	9.48	1 335
Joel
Beatrix	832	798	65.25	12.69	828
All Reefs	832	798	65.25	12.69	828
Moab Khotsong
Vaal Reef	938	786	85.53	46.69	3 994
C Reef	235	112	10.21	60.35	616
All Reefs	1 173	898	76.14	46.92	3 572
Total Harmony
Basal	4 132	3 525	42.67	36.64	1 564
Beatrix	832	798	65.25	12.69	828
B Reef	935	953	111.12	16.29	1 810
Elsburg	70	44	250.36	12.83	3 213
Vaal Reef	938	786	85.53	46.69	3 994
South Reef	1 474	1 572	59.30	23.05	1 367
VCR	1 023	945	83.74	17.33	1 451
C Reef	235	112	10.21	60.35	616
All Reefs	9 639	8 735	64.12	26.36	1 691

VCR: Ventersdorp Contract Reef

 

IMPERIAL

			CHANNEL
	Reef	Sampled	Width	Value	Gold
	Feet	Feet	(Inch)	(oz/t)	(In.oz/t)
Tshepong
Basal	5 830	4 987	4.00	5.41	22
B Reef	668	630	54.00	0.26	14
All Reefs	6 498	5 617	10.00	2.08	21
Phakisa
Basal	3 774	3 757	15.00	1.05	16
All Reefs	3 774	3 757	15.00	1.05	16
Bambanani
Basal	0	0	0.00	0.00	0
All Reefs	0	0	0.00	0.00	0
Doornkop
South Reef	4 834	5 157	23.00	0.68	16
All Reefs	4 834	5 157	23.00	0.68	16
Kusasalethu
VCR Reef	3 355	3 101	33.00	0.50	17
All Reefs	3 355	3 101	33.00	0.50	17
Target 1
Elsburg	229	144	99.00	0.37	37
All Reefs	229	144	99.00	0.37	37
Masimong 5
Basal	2 500	1 798	34.00	0.41	14
B Reef	2 397	2 497	41.00	0.55	22
All Reefs	4 897	4 295	38.00	0.50	19
Unisel
Basal	1 452	1 024	55.00	0.28	15
All Reefs	1 452	1 024	55.00	0.28	15
Joel
Beatrix	2 728	2 618	26.00	0.37	10
All Reefs	2 728	2 618	26.00	0.37	10
Moab Khotsong
Vaal Reef	3 078	2 579	34.00	1.35	46
C Reef	771	367	4.00	1.77	7
All Reefs	3 849	2 946	30.00	1.37	41
Total Harmony
Basal	13 556	11 566	17.00	1.06	18
Beatrix	2 728	2 618	26.00	0.37	10
B Reef	3 065	3 127	44.00	0.47	21
Elsburg	229	144	99.00	0.37	37
Vaal Reef	3 078	2 579	34.00	1.35	46
South Reef	4 834	5 157	23.00	0.68	16
VCR	3 355	3 101	33.00	0.50	17
C Reef	771	367	4.00	1.77	7
All Reefs	31 616	28 659	25.00	0.78	19

50

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DIRECTORATE AND ADMINISTRATION

HARMONY GOLD MINING COMPANY LIMITED

Harmony Gold Mining Company Limited was incorporated and registered as a public company in South Africa on 25 August 1950 Registration number: 1950/038232/06

CORPORATE OFFICE

Randfontein Office Park PO Box 2, Randfontein, 1760, South Africa Corner Main Reef Road and Ward Avenue Randfontein, 1759, South Africa Telephone: +27 11 411 2000 Website: www.harmony.co.za

DIRECTORS

PT Motsepe* (chairman), JM Motloba* (deputy chairman), M Msimang*^ (lead independent director), PW Steenkamp (chief executive officer), BP Lekubo (financial director), F Abbott (executive director), HE Mashego (executive director) JA Chissano*^#, FFT De Buck*^, KV Dicks*^, Dr DSS Lushaba*^, HG Motau*^, KT Nondumo*^, VP Pillay*^, GR Sibiya*^, MV Sisulu*^, JL Wetton*^, AJ Wilkens* * Non-executive ^ Independent # Mozambican

INVESTOR RELATIONS

E-mail: HarmonyIR@harmony.co.za Telephone: +27 11 411 2314 or +27 82 759 1775 Website: www.harmony.co.za

COMPANY SECRETARIAT

Telephone: +27 11 411 2359 E-mail: companysecretariat@harmony.co.za

TRANSFER SECRETARIES

Link Market Services South Africa (Proprietary) Limited (Registration number 2000/007239/07) 13th Floor, Rennie House, Ameshoff Street, Braamfontein PO Box 4844, Johannesburg, 2000, South Africa Telephone: +27 861 546 572 E-mail: info@linkmarketservices.co.za Fax: +27 86 674 4381

ADR* DEPOSITARY

Deutsche Bank Trust Company Americas c/o American Stock Transfer and Trust Company Operations Centre, 6201 15th Avenue, Brooklyn, NY 11219, United States E-mail queries: db@astfinancial.com Toll free (within the US): +1-886-249-2593 Int: +1 718 921 8137 Fax: +1 718 921 8334 *ADR: American Depositary Receipts

SPONSOR

JP Morgan Equities South Africa (Proprietary) Limited 1 Fricker Road, corner Hurlingham Road, Illovo, Johannesburg, 2196 Private Bag X9936, Sandton, 2146 Telephone: +27 11 507 0300 Fax: +27 11 507 0503

TRADING SYMBOLS

ISIN: ZAE 000015228

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Harmony Gold Mining Company Limited
Date: September 15, 2020			By: /s/ Boipelo Lekubo
			Name: Boipelo Lekubo
			Title: Financial Director