v3.25.3
Accounting Policies (Policies)
 12 Months Ended
Jun. 30, 2025
Accounting Policies, Changes In Accounting Estimates And Errors [Abstract]  
Accounting Policies Accounting policies
Basis of preparation
The principal accounting policies applied in the preparation of the consolidated financial statements have been consistently
applied in all years presented, except for the changes as described under "Recent accounting developments" below.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (IASB) and IFRS Interpretations Committee (IFRIC) Interpretations
(collectively IFRS Accounting Standards).
The consolidated financial statements have been prepared on a going concern basis.
The consolidated financial statements have been prepared to the nearest million and rounding may cause differences.
Restatement of comparative information
Group Income statement reclassification
The contingent consideration remeasurement has been presented separately on the group income statement due to its
materiality in the 2025 financial year. The contingent consideration remeasurement was included as part of other operating
expenses in the prior periods. The reclassification had no impact on any reported totals or sub-totals in the group income
statement, headline earnings or on any amounts presented in the group statement of comprehensive income, group balance
sheet, group statement of changes in shareholders’ equity and the group cash flow statement.
Restatement of disclosure of financial liability portion of trade and other payables
During the 2025 financial year, an understatement related to the 2024 amounts for the financial liability portion of trade and other
payables, as disclosed in the financial risk management note, was identified. Specifically, shaft-related liabilities and certain other
accruals had been omitted from the financial liabilities measured at amortised cost and liquidity risk disclosures pertaining to
trade and other payables. This resulted in the financial liability portion of trade and other payables being understated by
R1 425 million. These disclosures in the financial risk management note have therefore been restated for the 2024 financial year
(refer to note 37). The restatement had no impact on the group income statement, statement of comprehensive income, balance
sheet, statement of changes in shareholders’ equity, cash flow statement, any of the earnings per share amounts or any other
note disclosures.
Recent accounting developments
New standards, amendments to standards and interpretations to existing standards adopted by the group
During the financial year, the following new standards, amendments to standards and interpretations to existing standards were
adopted by the group. No other standards and amendments to standards that became effective during the 2025 year were
relevant to the consolidated financial statements.
IAS 1 Presentation of Financial Statements (Amendment) - Classification Of Liabilities as Current or Non-current
The IASB issued amendments to IAS 1 Presentation of Financial Statements to clarify its requirements for the presentation of
liabilities in the statement of financial position. The amendments are effective from annual reporting periods beginning on or after
1 January 2024. The amendments did not have a material impact on the group.
IAS 1 Presentation of Financial Statements (Amendment) - Non-current Liabilities With Covenants
The amendments improved the information an entity provides when its right to defer settlement of a liability for at least twelve
months is subject to compliance with covenants. The amendments also responded to stakeholders’ concerns about the
classification of such a liability as current or non-current. The amendments are effective for annual reporting periods beginning
on or after 1 January 2024. The amendments did not have a material impact on the group.
New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been
early adopted
At the date of authorisation of these financial statements, the standards, amendments to standards and interpretations relevant
to the consolidated financial statements listed below were in issue but not yet effective. These new standards and interpretations
have not been early adopted by the group and the group plans on adopting these standards, amendments to standards and
interpretations on the dates when they become effective. 
2Accounting policies continued
Recent accounting developments continued
New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been
early adopted continued
IFRS 7 Financial Instruments : Disclosures & IFRS 9 Financial Instruments (Amendment) - Contracts Referencing Nature-dependent
Electricity
The IASB has made targeted amendments to IFRS 9 Financial Instruments and related requirements in IFRS 7 Financial
Instruments: Disclosures to better report the financial effects of nature-dependent electricity contracts, which are often structured
as power purchase agreements. These amendments include:
▪clarifying the application of the ‘own-use’ requirements
▪permitting hedge accounting if these contracts are used as hedging instruments and
▪adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial
performance and cash flows.
The amendments are effective for annual reporting periods beginning on or after 1 January 2026. The amendments are not
expected to have a material impact on the group.
IFRS 7 Financial Instruments : Disclosures & IFRS 9 Financial Instruments (Amendment) - Classification And Measurement
The IASB issued Amendments to the Classification and Measurement of Financial Instruments in response to feedback received
as part of the post-implementation review of the classification and measurement requirements in IFRS 9 Financial Instruments
and related requirements in IFRS 7 Financial Instruments: Disclosures. The IASB amended to the requirements related to:
▪settling financial liabilities using an electronic payment system and
▪assessing contractual cash flow characteristics of financial assets, including those with environmental, social and governance
(ESG)-linked features.
The IASB also amended disclosure requirements relating to investments in equity instruments designated at fair value through
other comprehensive income and added disclosure requirements for financial instruments with contingent features that do not
relate directly to basic lending risks and costs. The amendments are effective for annual reporting periods beginning on or after
1 January 2026. The amendments are not expected to have a material impact on the group.
IFRS 18 Presentation and Disclosure in Financial Statements
The IASB issued IFRS 18 Presentation and Disclosure in Financial Statements, with the aim to improve the quality of financial
reporting by:
▪requiring defined subtotals in the statement of profit or loss
▪requiring disclosure about management-defined performance measures and
▪adding new principles for aggregation and disaggregation of information.
The IASB expects these improvements will enable investors to make more informed decisions leading to better allocations of
capital that will contribute to long-term financial stability. This standard replaces IAS 1 Presentation of Financial Statements.
IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027. Harmony is still assessing the impact of
this new accounting standard.
Measurement basis
The financial statements have been prepared under the historical cost convention except for certain financial assets and
financial liabilities which are measured at fair value through profit or loss or other comprehensive income – refer to note 37.
Group accounting policies
Accounting policies are included in the relevant notes to the consolidated financial statements and have been highlighted
between red lines in the notes to the consolidated financial statements. The accounting policies that follow are applied
throughout the financial statements.
Consolidation
The group recognises that control is the single basis for consolidation for all types of entities in accordance with IFRS 10
Consolidated Financial Statements. The consolidated financial information includes the financial statements of the company, its
subsidiaries, interest in associates and joint arrangements and structured entities. Where the group has no control over an entity,
that entity is not consolidated.
Control
The group, regardless of the nature of its involvement with an entity, shall determine whether it is a parent by assessing whether
it controls the investee. The group controls an entity when it is exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
(i) Subsidiaries
Subsidiaries are entities over which the group has control. Subsidiaries are fully consolidated from the date on which control is
transferred to the group up until when that control ceases. Intercompany transactions, balances and unrealised gains or losses
on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the group.
2Accounting policies continued
Group accounting policies continued
2.1Consolidation continued
Control continued
(i) Subsidiaries continued
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for
the acquisition of an acquiree is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the
group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-
by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the group’s share of the
identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary
acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement below operating profit
or loss.
(ii) Associates
Associates are entities in which the group has significant influence, but not control, over operational and financial policies. This
may be when there is a shareholding of between 20% and 50% of the voting rights or when significant influence can be
otherwise demonstrated, for example where the group has the right of representation on the board of directors, or other
governing body, of the entity.
Investments in associates are accounted for by using the equity method of accounting, and are initially recognised at cost. The
group’s investment in associates includes goodwill identified on acquisition. Cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. The group’s share of the associates’ post-acquisition profits or losses is
recognised in the income statement, and its share of post-acquisition movement in reserves is recognised in other reserves.
When the group’s share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate. The carrying value of an
associate is reviewed on a regular basis and, if impairment in the carrying value has occurred, it is written off in the period in
which such impairment is identified.
Accounting policies of associates have been reviewed to ensure consistency with the policies adopted by the group.
(iii) Joint arrangements
Joint arrangements are arrangements of which two or more parties have joint control and are contractually bound. The joint
arrangement can either be a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that
have joint control of the arrangement and have the right to the assets, and obligations for the liabilities, relating to the
arrangement. These parties are called joint operators. A joint venture is a joint arrangement where the parties that have joint
control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.
For interest in joint operations, the group includes its share of the joint operations' individual income and expenses, assets and
liabilities and cash flows on a line-by-line basis with similar items in the group’s financial statements.
Where an additional interest in a joint operation is acquired, the principles of IFRS 3 are applied to account for the transaction.
The group recognises the portion of gains or losses on the sale of assets by the group to the joint operation that is attributable to
the other joint operators. The group does not recognise its share of profits or losses from the joint operation that results from the
purchase of assets by the group from the joint operation until it resells the assets to an independent party. However, if a loss on
the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is
recognised immediately. The group recognises its interest in a joint venture as an investment and accounts for it using the equity
accounting method.
(iv) Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by
means of contractual arrangements.
The accounting treatment for a structured entity will fall into one of the aforementioned categories (i to iii) depending on whether
the group has control over that structured entity.
2.2Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in South African Rand, which is the group’s presentation currency.
References to “A$” refers to Australian currency, “R” to South African currency, “$” or “US$” to United States currency and
“PGK” or “Kina” to Papua New Guinean currency.
2Accounting policies continued
Group accounting policies continued
2.2Foreign currency translation continued
(ii) Transactions and balances
Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation to
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income
statement. This includes the gains and losses on the translation of the US$-denominated facilities.
(iii) Group companies
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are translated into the presentation currency as follows:
▪Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
while equity items are translated at historic rates
▪Income and expenses for each income statement are translated at average exchange rates (the rate on the date of the
transaction is used if the average is not a reasonable rate for the translation of the transaction)
▪All resulting exchange differences are recognised as a separate component of other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive
income. When a foreign operation is sold or control is otherwise lost, exchange differences that were recorded in other
comprehensive income are recognised in profit or loss in the period of the disposal or change in control. Goodwill and fair value
adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
2.3Derivatives and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends
on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The difference between the fair value of the derivative at initial recognition and expected forward transaction price is deferred
and recognised as a day one gain or loss. The day one gain or loss is amortised over the derivative contract period and
recognised in profit or loss in gains/losses on derivatives.
The full fair value of a derivative is classified as a non-current asset or liability when the remaining maturity is more than
12 months; it is classified as a current asset or liability when the remaining maturity is less than 12 months.
(i) Cash flow hedge
The group designates certain derivatives as hedges of a particular risk associated with the cash flows of highly probable forecast
transactions (cash flow hedges). At inception of the hedge relationship, the group documents the economic relationship between
hedging instruments and hedged items, including whether changes in the cash flows of the hedging instruments are expected to
offset changes in the cash flows of hedged items. The group documents its risk management objective and strategy for
undertaking its hedge transactions.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss within gains/losses on derivatives.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the forecast sale that is hedged takes place
and affects profit or loss. The gain or loss relating to the effective portion of the Rand and US$ gold forward sales contracts and
Rand and US$ gold collars is recognised in profit or loss within revenue.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction that
was hedged is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately reclassified to profit or loss.
(ii) Derivatives not designated for hedge accounting purposes
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value as well as gains and losses on
expiry, disposal or termination of any derivative instrument that does not qualify for hedge accounting are recognised
immediately in profit or loss and are included in gains/losses on derivatives.
2.4Exploration expenditure
The group expenses all exploration and evaluation expenditures until it is concluded that the project is technically feasible and
commercially viable, and that future economic benefits are therefore probable. The information used to make that determination
depends on the level of exploration as well as the degree of confidence in the ore body as set out below.
Exploration and evaluation expenditure on greenfield sites, being those where the group does not have any mineral deposits
which are already being mined or developed, is expensed as incurred until the technical and commercial viability of the project
has been demonstrated usually through the completion of a final feasibility study. However, in certain instances, the technical
and commercial viability of the deposit may be demonstrated at an earlier stage, for example where an extended feasibility study
is conducted and the underlying feasibility study in respect of specific components of the mineral deposit has advanced to such
a stage that significant commercially viable reserves has been established, and the other criteria for the recognition of an asset
have been met. At this point the expenditure is capitalised as mine development cost to the extent that future economic benefits
are expected.
2Accounting policies continued
Group accounting policies continued
2.4Exploration expenditure continued
Exploration and evaluation expenditure on brownfield sites, being those adjacent to mineral deposits which are already being
mined or developed, is expensed as incurred until the group is able to demonstrate that future economic benefits are probable
through the completion of a feasibility study, after which the expenditure is capitalised as mine development cost to the extent
that future economic benefits are expected. A “feasibility study” consists of a comprehensive study of the viability of a mineral
project that has advanced to a stage where the mining method has been established, and which, if an effective method of
mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical,
engineering, operating economic factors and the evaluation of other relevant factors. The feasibility study, when combined with
existing knowledge of the mineral property that is adjacent to mineral deposits that are already being mined or developed, allows
the group to conclude that the project is technically feasible and commercially viable.
Exploration and evaluation expenditure relating to extensions of mineral deposits which are already being mined or developed,
including expenditure on the definition of mineralisation of such mineral deposits, is capitalised as a mine development cost
following the completion of an economic evaluation equivalent to a feasibility study. This economic evaluation is distinguished
from a feasibility study in that some of the information that would normally be determined in a feasibility study is instead obtained
from the existing mine or development. This information, when combined with existing knowledge of the mineral property already
being mined or developed, allows the directors to conclude that the project is technically feasible and commercially viable.
2.5Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation or depreciation and are tested annually for impairment or
when there is an indication of impairment. Assets that are subject to amortisation are reviewed annually on 30 June for
impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised in the income statement for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating unit or CGU). Each operating shaft, along with allocated common assets such as plants and administrative
offices, is considered to be a cash generating unit as each shaft is largely independent from the cash flows of other shafts and
assets belonging to the group.
Fair value less cost to sell is generally determined by using discounted estimated after-tax future cash flows. Future cash flows
are estimated based on quantities of recoverable minerals, expected commodity prices (considering current and historical prices,
price trends and related factors), production levels and cash costs of production, all based on life-of-mine (LoM) plans. Future
cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the
time value of money and risk specific to the asset. Refer to note 14 for detail.
The term “recoverable minerals” refers to the estimated amount of gold that will be obtained from reserves and resources and all
related exploration stage mineral interests (except for other mine-related exploration potential and greenfields exploration
potential discussed separately below) after taking into account losses during ore processing and treatment. Estimates of
recoverable minerals from such related exploration stage mineral interests will be risk adjusted based on management’s relative
confidence in such materials.
In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely
independent of cash flows from other asset groups. Except for other mine-related exploration potential and greenfields
exploration potential, estimates of future undiscounted cash flows are included on an area of interest basis, which generally
represents an individual operating mine, even if the mines are included in a larger mine complex. Areas of exploration potential
are grouped on an area of activity basis.
In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential,
cash flows and fair values are individually evaluated based primarily on recent exploration results and recent transactions
involving sales of similar properties, if any. Assumptions underlying future cash flow estimates are subject to significant risks and
uncertainties.
Impairment losses on goodwill are recognised immediately in the income statement and are not reversed. The impairment
testing is performed annually on 30 June or when events or changes in circumstances indicate that it may be impaired.
Non-financial assets other than goodwill that suffered an impairment are reviewed annually for possible reversal of the
impairment at 30 June. Reversal of impairments is also considered when there is objective evidence to indicate that the asset is
no longer impaired. Where an impairment subsequently reverses, the carrying amount of the asset or CGU is increased to the
revised estimate of its recoverable amount, but not higher than the carrying value that would have been determined had no
impairment been recognised in prior years.
2.6Operating profit
The group defines operating profit as the profit earned from the normal core mining operations. In reporting operating profit in the
income statement, capital transactions involving subsidiaries, joint arrangements and associates are excluded from operating
profit as these are not considered to be part of the mining operations of the Harmony group. Any gains or losses on capital
transactions are presented below the operating profit line.
Basis of preparation Basis of preparation
The principal accounting policies applied in the preparation of the consolidated financial statements have been consistently
applied in all years presented, except for the changes as described under "Recent accounting developments" below.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (IASB) and IFRS Interpretations Committee (IFRIC) Interpretations
(collectively IFRS Accounting Standards).
The consolidated financial statements have been prepared on a going concern basis.
The consolidated financial statements have been prepared to the nearest million and rounding may cause differences.
Measurement basis
The financial statements have been prepared under the historical cost convention except for certain financial assets and
financial liabilities which are measured at fair value through profit or loss or other comprehensive income – refer to note 37.
Statement of IFRS compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board (IASB) and IFRS Interpretations Committee (IFRIC) Interpretations
(collectively IFRS Accounting Standards).
New standards, amendments to standards and interpretations to existing standards adopted by the group IAS 1 Presentation of Financial Statements (Amendment) - Classification Of Liabilities as Current or Non-current
The IASB issued amendments to IAS 1 Presentation of Financial Statements to clarify its requirements for the presentation of
liabilities in the statement of financial position. The amendments are effective from annual reporting periods beginning on or after
1 January 2024. The amendments did not have a material impact on the group.
IAS 1 Presentation of Financial Statements (Amendment) - Non-current Liabilities With Covenants
The amendments improved the information an entity provides when its right to defer settlement of a liability for at least twelve
months is subject to compliance with covenants. The amendments also responded to stakeholders’ concerns about the
classification of such a liability as current or non-current. The amendments are effective for annual reporting periods beginning
on or after 1 January 2024. The amendments did not have a material impact on the group.
New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been early adopted New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been
early adopted
At the date of authorisation of these financial statements, the standards, amendments to standards and interpretations relevant
to the consolidated financial statements listed below were in issue but not yet effective. These new standards and interpretations
have not been early adopted by the group and the group plans on adopting these standards, amendments to standards and
interpretations on the dates when they become effective. 
2Accounting policies continued
Recent accounting developments continued
New standards, amendments to standards and interpretations to existing standards that are not yet effective and have not been
early adopted continued
IFRS 7 Financial Instruments : Disclosures & IFRS 9 Financial Instruments (Amendment) - Contracts Referencing Nature-dependent
Electricity
The IASB has made targeted amendments to IFRS 9 Financial Instruments and related requirements in IFRS 7 Financial
Instruments: Disclosures to better report the financial effects of nature-dependent electricity contracts, which are often structured
as power purchase agreements. These amendments include:
▪clarifying the application of the ‘own-use’ requirements
▪permitting hedge accounting if these contracts are used as hedging instruments and
▪adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial
performance and cash flows.
The amendments are effective for annual reporting periods beginning on or after 1 January 2026. The amendments are not
expected to have a material impact on the group.
IFRS 7 Financial Instruments : Disclosures & IFRS 9 Financial Instruments (Amendment) - Classification And Measurement
The IASB issued Amendments to the Classification and Measurement of Financial Instruments in response to feedback received
as part of the post-implementation review of the classification and measurement requirements in IFRS 9 Financial Instruments
and related requirements in IFRS 7 Financial Instruments: Disclosures. The IASB amended to the requirements related to:
▪settling financial liabilities using an electronic payment system and
▪assessing contractual cash flow characteristics of financial assets, including those with environmental, social and governance
(ESG)-linked features.
The IASB also amended disclosure requirements relating to investments in equity instruments designated at fair value through
other comprehensive income and added disclosure requirements for financial instruments with contingent features that do not
relate directly to basic lending risks and costs. The amendments are effective for annual reporting periods beginning on or after
1 January 2026. The amendments are not expected to have a material impact on the group.
IFRS 18 Presentation and Disclosure in Financial Statements
The IASB issued IFRS 18 Presentation and Disclosure in Financial Statements, with the aim to improve the quality of financial
reporting by:
▪requiring defined subtotals in the statement of profit or loss
▪requiring disclosure about management-defined performance measures and
▪adding new principles for aggregation and disaggregation of information.
The IASB expects these improvements will enable investors to make more informed decisions leading to better allocations of
capital that will contribute to long-term financial stability. This standard replaces IAS 1 Presentation of Financial Statements.
IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027. Harmony is still assessing the impact of
this new accounting standard.
Consolidation Consolidation
The group recognises that control is the single basis for consolidation for all types of entities in accordance with IFRS 10
Consolidated Financial Statements. The consolidated financial information includes the financial statements of the company, its
subsidiaries, interest in associates and joint arrangements and structured entities. Where the group has no control over an entity,
that entity is not consolidated.
Control
The group, regardless of the nature of its involvement with an entity, shall determine whether it is a parent by assessing whether
it controls the investee. The group controls an entity when it is exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
(i) Subsidiaries
Subsidiaries are entities over which the group has control. Subsidiaries are fully consolidated from the date on which control is
transferred to the group up until when that control ceases. Intercompany transactions, balances and unrealised gains or losses
on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the group.
2Accounting policies continued
Group accounting policies continued
2.1Consolidation continued
Control continued
(i) Subsidiaries continued
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for
the acquisition of an acquiree is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the
group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-
by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the group’s share of the
identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary
acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement below operating profit
or loss.
(ii) Associates
Associates are entities in which the group has significant influence, but not control, over operational and financial policies. This
may be when there is a shareholding of between 20% and 50% of the voting rights or when significant influence can be
otherwise demonstrated, for example where the group has the right of representation on the board of directors, or other
governing body, of the entity.
Investments in associates are accounted for by using the equity method of accounting, and are initially recognised at cost. The
group’s investment in associates includes goodwill identified on acquisition. Cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. The group’s share of the associates’ post-acquisition profits or losses is
recognised in the income statement, and its share of post-acquisition movement in reserves is recognised in other reserves.
When the group’s share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate. The carrying value of an
associate is reviewed on a regular basis and, if impairment in the carrying value has occurred, it is written off in the period in
which such impairment is identified.
Accounting policies of associates have been reviewed to ensure consistency with the policies adopted by the group.
(iii) Joint arrangements
Joint arrangements are arrangements of which two or more parties have joint control and are contractually bound. The joint
arrangement can either be a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that
have joint control of the arrangement and have the right to the assets, and obligations for the liabilities, relating to the
arrangement. These parties are called joint operators. A joint venture is a joint arrangement where the parties that have joint
control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.
For interest in joint operations, the group includes its share of the joint operations' individual income and expenses, assets and
liabilities and cash flows on a line-by-line basis with similar items in the group’s financial statements.
Where an additional interest in a joint operation is acquired, the principles of IFRS 3 are applied to account for the transaction.
The group recognises the portion of gains or losses on the sale of assets by the group to the joint operation that is attributable to
the other joint operators. The group does not recognise its share of profits or losses from the joint operation that results from the
purchase of assets by the group from the joint operation until it resells the assets to an independent party. However, if a loss on
the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is
recognised immediately. The group recognises its interest in a joint venture as an investment and accounts for it using the equity
accounting method.
(iv) Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by
means of contractual arrangements.
The accounting treatment for a structured entity will fall into one of the aforementioned categories (i to iii) depending on whether
the group has control over that structured entity.
Consolidation, Subsidiaries (i) Subsidiaries
Subsidiaries are entities over which the group has control. Subsidiaries are fully consolidated from the date on which control is
transferred to the group up until when that control ceases. Intercompany transactions, balances and unrealised gains or losses
on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the group.
2Accounting policies continued
Group accounting policies continued
2.1Consolidation continued
Control continued
(i) Subsidiaries continued
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for
the acquisition of an acquiree is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the
group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-
by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the group’s share of the
identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary
acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement below operating profit
or loss.
Business combinations The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for
the acquisition of an acquiree is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the
group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-
by-acquisition basis, the group recognises any non-controlling interests in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the group’s share of the
identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary
acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement below operating profit
or loss.
Consolidation, Associates (ii) Associates
Associates are entities in which the group has significant influence, but not control, over operational and financial policies. This
may be when there is a shareholding of between 20% and 50% of the voting rights or when significant influence can be
otherwise demonstrated, for example where the group has the right of representation on the board of directors, or other
governing body, of the entity.
Investments in associates are accounted for by using the equity method of accounting, and are initially recognised at cost. The
group’s investment in associates includes goodwill identified on acquisition. Cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. The group’s share of the associates’ post-acquisition profits or losses is
recognised in the income statement, and its share of post-acquisition movement in reserves is recognised in other reserves.
When the group’s share of losses in an associate equals or exceeds its interest in the associate, the group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate. The carrying value of an
associate is reviewed on a regular basis and, if impairment in the carrying value has occurred, it is written off in the period in
which such impairment is identified.
Accounting policies of associates have been reviewed to ensure consistency with the policies adopted by the group.
Consolidation, Joint arrangements Joint arrangements
Joint arrangements are arrangements of which two or more parties have joint control and are contractually bound. The joint
arrangement can either be a joint operation or a joint venture. A joint operation is a joint arrangement whereby the parties that
have joint control of the arrangement and have the right to the assets, and obligations for the liabilities, relating to the
arrangement. These parties are called joint operators. A joint venture is a joint arrangement where the parties that have joint
control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.
For interest in joint operations, the group includes its share of the joint operations' individual income and expenses, assets and
liabilities and cash flows on a line-by-line basis with similar items in the group’s financial statements.
Where an additional interest in a joint operation is acquired, the principles of IFRS 3 are applied to account for the transaction.
The group recognises the portion of gains or losses on the sale of assets by the group to the joint operation that is attributable to
the other joint operators. The group does not recognise its share of profits or losses from the joint operation that results from the
purchase of assets by the group from the joint operation until it resells the assets to an independent party. However, if a loss on
the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is
recognised immediately. The group recognises its interest in a joint venture as an investment and accounts for it using the equity
accounting method.
Consolidation, Structured entities (iv) Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by
means of contractual arrangements.
The accounting treatment for a structured entity will fall into one of the aforementioned categories (i to iii) depending on whether
the group has control over that structured entity.
Foreign currency translation 2.2Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in South African Rand, which is the group’s presentation currency.
References to “A$” refers to Australian currency, “R” to South African currency, “$” or “US$” to United States currency and
“PGK” or “Kina” to Papua New Guinean currency.
2Accounting policies continued
Group accounting policies continued
2.2Foreign currency translation continued
(ii) Transactions and balances
Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation to
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income
statement. This includes the gains and losses on the translation of the US$-denominated facilities.
(iii) Group companies
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are translated into the presentation currency as follows:
▪Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
while equity items are translated at historic rates
▪Income and expenses for each income statement are translated at average exchange rates (the rate on the date of the
transaction is used if the average is not a reasonable rate for the translation of the transaction)
▪All resulting exchange differences are recognised as a separate component of other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive
income. When a foreign operation is sold or control is otherwise lost, exchange differences that were recorded in other
comprehensive income are recognised in profit or loss in the period of the disposal or change in control. Goodwill and fair value
adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
Functional and presentation currency (i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in South African Rand, which is the group’s presentation currency.
References to “A$” refers to Australian currency, “R” to South African currency, “$” or “US$” to United States currency and
“PGK” or “Kina” to Papua New Guinean currency.
Derivatives and hedging activities Derivatives and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends
on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The difference between the fair value of the derivative at initial recognition and expected forward transaction price is deferred
and recognised as a day one gain or loss. The day one gain or loss is amortised over the derivative contract period and
recognised in profit or loss in gains/losses on derivatives.
The full fair value of a derivative is classified as a non-current asset or liability when the remaining maturity is more than
12 months; it is classified as a current asset or liability when the remaining maturity is less than 12 months.
(i) Cash flow hedge
The group designates certain derivatives as hedges of a particular risk associated with the cash flows of highly probable forecast
transactions (cash flow hedges). At inception of the hedge relationship, the group documents the economic relationship between
hedging instruments and hedged items, including whether changes in the cash flows of the hedging instruments are expected to
offset changes in the cash flows of hedged items. The group documents its risk management objective and strategy for
undertaking its hedge transactions.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss within gains/losses on derivatives.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the forecast sale that is hedged takes place
and affects profit or loss. The gain or loss relating to the effective portion of the Rand and US$ gold forward sales contracts and
Rand and US$ gold collars is recognised in profit or loss within revenue.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction that
was hedged is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately reclassified to profit or loss.
(ii) Derivatives not designated for hedge accounting purposes
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value as well as gains and losses on
expiry, disposal or termination of any derivative instrument that does not qualify for hedge accounting are recognised
immediately in profit or loss and are included in gains/losses on derivatives.
Exploration expenditure 2.4Exploration expenditure
The group expenses all exploration and evaluation expenditures until it is concluded that the project is technically feasible and
commercially viable, and that future economic benefits are therefore probable. The information used to make that determination
depends on the level of exploration as well as the degree of confidence in the ore body as set out below.
Exploration and evaluation expenditure on greenfield sites, being those where the group does not have any mineral deposits
which are already being mined or developed, is expensed as incurred until the technical and commercial viability of the project
has been demonstrated usually through the completion of a final feasibility study. However, in certain instances, the technical
and commercial viability of the deposit may be demonstrated at an earlier stage, for example where an extended feasibility study
is conducted and the underlying feasibility study in respect of specific components of the mineral deposit has advanced to such
a stage that significant commercially viable reserves has been established, and the other criteria for the recognition of an asset
have been met. At this point the expenditure is capitalised as mine development cost to the extent that future economic benefits
are expected.
2Accounting policies continued
Group accounting policies continued
2.4Exploration expenditure continued
Exploration and evaluation expenditure on brownfield sites, being those adjacent to mineral deposits which are already being
mined or developed, is expensed as incurred until the group is able to demonstrate that future economic benefits are probable
through the completion of a feasibility study, after which the expenditure is capitalised as mine development cost to the extent
that future economic benefits are expected. A “feasibility study” consists of a comprehensive study of the viability of a mineral
project that has advanced to a stage where the mining method has been established, and which, if an effective method of
mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical,
engineering, operating economic factors and the evaluation of other relevant factors. The feasibility study, when combined with
existing knowledge of the mineral property that is adjacent to mineral deposits that are already being mined or developed, allows
the group to conclude that the project is technically feasible and commercially viable.
Exploration and evaluation expenditure relating to extensions of mineral deposits which are already being mined or developed,
including expenditure on the definition of mineralisation of such mineral deposits, is capitalised as a mine development cost
following the completion of an economic evaluation equivalent to a feasibility study. This economic evaluation is distinguished
from a feasibility study in that some of the information that would normally be determined in a feasibility study is instead obtained
from the existing mine or development. This information, when combined with existing knowledge of the mineral property already
being mined or developed, allows the directors to conclude that the project is technically feasible and commercially viable.
Impairment of non-financial assets 2.5Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation or depreciation and are tested annually for impairment or
when there is an indication of impairment. Assets that are subject to amortisation are reviewed annually on 30 June for
impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised in the income statement for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating unit or CGU). Each operating shaft, along with allocated common assets such as plants and administrative
offices, is considered to be a cash generating unit as each shaft is largely independent from the cash flows of other shafts and
assets belonging to the group.
Fair value less cost to sell is generally determined by using discounted estimated after-tax future cash flows. Future cash flows
are estimated based on quantities of recoverable minerals, expected commodity prices (considering current and historical prices,
price trends and related factors), production levels and cash costs of production, all based on life-of-mine (LoM) plans. Future
cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the
time value of money and risk specific to the asset. Refer to note 14 for detail.
The term “recoverable minerals” refers to the estimated amount of gold that will be obtained from reserves and resources and all
related exploration stage mineral interests (except for other mine-related exploration potential and greenfields exploration
potential discussed separately below) after taking into account losses during ore processing and treatment. Estimates of
recoverable minerals from such related exploration stage mineral interests will be risk adjusted based on management’s relative
confidence in such materials.
In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely
independent of cash flows from other asset groups. Except for other mine-related exploration potential and greenfields
exploration potential, estimates of future undiscounted cash flows are included on an area of interest basis, which generally
represents an individual operating mine, even if the mines are included in a larger mine complex. Areas of exploration potential
are grouped on an area of activity basis.
In the case of mineral interests associated with other mine-related exploration potential and greenfields exploration potential,
cash flows and fair values are individually evaluated based primarily on recent exploration results and recent transactions
involving sales of similar properties, if any. Assumptions underlying future cash flow estimates are subject to significant risks and
uncertainties.
Impairment losses on goodwill are recognised immediately in the income statement and are not reversed. The impairment
testing is performed annually on 30 June or when events or changes in circumstances indicate that it may be impaired.
Non-financial assets other than goodwill that suffered an impairment are reviewed annually for possible reversal of the
impairment at 30 June. Reversal of impairments is also considered when there is objective evidence to indicate that the asset is
no longer impaired. Where an impairment subsequently reverses, the carrying amount of the asset or CGU is increased to the
revised estimate of its recoverable amount, but not higher than the carrying value that would have been determined had no
impairment been recognised in prior years.
Operating profit Operating profit
The group defines operating profit as the profit earned from the normal core mining operations. In reporting operating profit in the
income statement, capital transactions involving subsidiaries, joint arrangements and associates are excluded from operating
profit as these are not considered to be part of the mining operations of the Harmony group. Any gains or losses on capital
transactions are presented below the operating profit line.
Revenue (a) Commodities
Revenue from metal sales include the sale of gold, silver and uranium. Revenue from metal sales is recognised when the group
satisfies its performance obligations under its contract with the customer, by transferring such metals to the customer's control.
Transfer of control is generally determined to be when the risk and title to the metals passes to the customer. Revenue is
measured based on the consideration specified in the contract with the customer and is driven by the quoted market prices of
the metals.
(b) Toll treatment
The group has entered into agreements with various third parties to treat gold-bearing material at certain of the group's
metallurgical plants in South Africa. The determination of the consideration receivable is set out in each individual contract,
based on the third parties' specific circumstances. Revenue from toll treatment services is recognised as the group satisfies its
single performance obligation under its contract with the third parties, which is the recovery of the gold through the treatment
process and the facilitation of the ultimate sale of recovered gold. This is satisfied over time. The gold-bearing material, and
thereafter recovered gold, remains at all times under control of the third parties until the ultimate sale of the recovered gold.
Harmony therefore acts as agent in treating the gold-bearing material. Settlement is done in the month following the sale of gold
(see below).
Subsequent to treatment, the group delivers the recovered gold on behalf of the third parties to Rand Refinery for further refining,
whereafter it is sold. The group acts as an agent in the sales process, receiving payment on behalf of the third parties before
transferring the amounts owed to them.
(c) Hedging
The effective portion of gains or losses on the derivatives designated as cash flow hedging items (forecast sales transactions)
are recognised in revenue when the forecast sales transactions occur. See the accounting policy for derivatives and hedging
activities in note 2.
Investment income Interest income is recognised on the effective interest method, taking into account the principal outstanding and the effective rate
over the period to maturity, when it is determined that such income will accrue to the group. Dividend income is recognised when
the shareholder's right to receive payment is established. This is recognised at the last date of registration.
Cash flows from interest and dividends received are classified under operating activities in the cash flow statement.
Taxation Taxation is made up of current and deferred taxation. The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the balance sheet date in the countries where the group operates and generates taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions, where appropriate, on the basis of amounts expected to be
paid to the tax authorities.
Deferred taxation is recognised on temporary differences existing at each reporting date between the tax base of all assets and
liabilities and their carrying amounts. Substantively enacted tax rates are used to determine future anticipated effective tax rates
which in turn are used in the determination of deferred taxation, except to the extent that deferred tax arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and does not affect the accounting or
taxable profit or loss at the time of the transaction. Deferred tax is charged to profit or loss, except where the tax relates to items
recognised in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive
income or directly in equity. The effect on deferred tax of any changes in tax rates is recognised in the income statement, except
to the extent that it relates to items previously charged or credited directly to equity.
The principal temporary differences arise from amortisation and depreciation on property, plant and equipment, provisions,
unutilised tax losses, unutilised capital allowances carried forward and unrealised gains and losses on the gold forward sale
contracts and gold collars sale contracts. Deferred tax assets relating to the carry forward of unutilised tax losses and unutilised
capital allowances are recognised to the extent that it is probable that future taxable profit will be available against which the
unutilised tax losses and unutilised capital allowances can be utilised. The recoverability of these assets is reviewed at each
reporting date and adjusted if recovery is no longer probable.
Deferred income tax is provided on temporary differences arising from investments in subsidiaries, joint ventures and associates,
except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Dividends Dividends declared are recognised in the period in which they are approved by the board of directors. Dividends are payable in
South African Rand.
Cash flows from dividends paid are classified under financing activities in the cash flow statement.
Mining assets Mining assets, including mine development costs and mine plant facilities, are initially recorded at cost, whereafter they are
measured at cost less accumulated depreciation and impairment. Costs include expenditure that is directly attributable to the
acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of
the item can be measured reliably.
The net assets of operations placed on care and maintenance are impaired to their recoverable amount. Expenditure on the care
and maintenance of these operations is charged against income, as incurred. Mineral and surface use rights represent mineral
and surface use rights for parcels of land, both owned and not owned by the group.
Mineral and surface rights include acquired mineral use rights in production, development and exploration phase properties. The
amount capitalised related to a mineral and surface right, either as an individual asset purchase or as part of a business
combination, is the fair value at acquisition.
The group’s mineral use rights are enforceable regardless of whether proved or probable reserves have been established. In
certain limited situations, the nature of use changes from an exploration right to a mining right upon the establishment of proved
and probable reserves. The group has the ability and intent to renew mineral use rights where the existing term is not sufficient
to recover all identified and valued proved and probable reserves and/or undeveloped mineral interests.
Depreciation
Depreciation of mining assets is computed principally by the units-of-production method over life-of-mine based on estimated
quantities of economically recoverable proved and probable reserves, which can be recovered in future from known mineral
deposits.
Mineral rights associated with production phase mineral interests are amortised over the life-of-mine using the units-of-
production method in order to match the amortisation with the expected underlying future cash flows.
Impairment
Testing for impairment is done in terms of the group policy as discussed in note 2.5.
Scrapping of assets
Where significant adverse changes have taken place relating to the useful life of an asset, that asset is tested for impairment in
terms of the group policy as discussed in note 2.5. Whether or not an impairment is recognised, it is then necessary to review
the useful lives and residual values of the assets within the CGU – this is reviewed at least annually. Where necessary, the
useful lives and residual values of the individual assets are revised.
Where the useful life of an asset is nil as a result of no future economic benefit expected from the use or disposal of that asset, it
is necessary to derecognise the asset. The loss arising from the derecognition is included in profit or loss in the period in which
the asset was derecognised.
Stripping activities
The removal of overburden and other mine waste materials is often necessary during the initial development of an opencast
mine site, in order to access the mineral ore deposit. The directly attributable cost of this activity is capitalised in full within mining
assets under construction, until the point at which the mine is considered to be capable of commercial production. The removal
of waste material after the point at which a mine is capable of commercial production is referred to as production stripping.
When the waste removal activity improves access to ore extracted in the current period, the costs of production stripping are
charged to the income statement as operating costs in accordance with the principles of IAS 2 Inventories.
Where production stripping activity both produces inventory and improves access to ore in future periods the associated costs of
waste removal are allocated between the two elements. The portion which benefits future ore extraction is capitalised within
stripping and development capital expenditure. If the amount to be capitalised cannot be specifically identified, it is determined
based on the volume of waste extracted compared to expected volume for the identified component of the orebody. Components
are specific volumes of a mine’s orebody that are determined by reference to the life-of-mine plan.
In certain instances significant levels of waste removal may occur during the production phase with little or no associated
production. The cost of this waste removal is capitalised in full.
All amounts capitalised in respect of waste removal are depreciated using the units-of-production method based on proved and
probable ore reserves of the component of the orebody to which they relate.
The effects of changes to the life-of-mine plan on the expected cost of waste removal or remaining reserves for a component are
accounted for prospectively as a change in estimate.
Mining assets under construction At the group’s surface mines, when it has been determined that a mineral property can be economically developed as a result of
establishing proved and probable reserves, costs incurred to develop the property are capitalised as incurred until the mine is
considered to have moved into the production phase. These costs include costs to further delineate the orebody and remove
overburden to initially expose the orebody.
At the group’s underground mines, all costs incurred to develop the property, including costs to access specific ore blocks or
other areas of the underground mine, are capitalised to the extent that such costs will provide future economic benefits. These
costs include the cost of shaft sinking and access, the costs of building access ways, lateral development, drift development,
ramps, box cuts and other infrastructure development.
Where a depreciable asset is used in the construction or extension of a mine, the depreciation is capitalised against the mine’s
cost.
Mineral interests associated with development and exploration phase mineral interests are not amortised until such time as the
underlying property is converted to the production stage.
Capitalisation of pre-production costs ceases when commercial levels of production are reached. Commercial levels of
production are discussed under “production start date” above.
Undeveloped properties Undeveloped properties are initially recognised at cost, which is generally based on the fair value of resources obtained through
acquisitions. The carrying values of these properties are tested for impairment or reversal of previously recognised impairment
when an indicator is identified. Once development commences, these properties are transferred to mining assets and accounted
for in accordance with the related accounting policy.
Other non-mining assets Land is shown at cost and not depreciated. Other non-mining fixed assets are shown at cost less accumulated depreciation and
accumulated impairment losses. Other non-mining fixed assets are depreciated on a straight-line basis over their estimated
useful lives as follows:
▪Vehicles at 20% per year
▪Computer equipment at 33.3% per year.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
Financial assets financial assets (applicable to notes 15, 16, 17 and 18)
Financial assets are initially recognised when the group becomes a party to their contractual arrangements. On initial
recognition, a financial asset is classified as measured at:
▪Amortised cost
▪Fair value through other comprehensive income (FVTOCI) or
▪Fair value through profit or loss (FVTPL).
A financial asset is classified as measured at amortised cost if it is held within the business model whose objective is to hold
assets to collect contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
The group measures a financial asset initially at its fair value plus, in the case of a financial asset not at FVTPL, transaction
costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL
are expensed. The subsequent measurement of financial assets is discussed below.
Financial asset category
Description
Debt instruments at
amortised cost
Financial assets at amortised cost consist of restricted cash, certain restricted investments,
loans, trade receivables and cash and cash equivalents. Interest income from these financial
assets is included in investment income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss. Impairment losses are
presented in other operating expenses in the income statement.
Debt instruments at fair
value through profit or loss
Equity-linked investments which are held to meet rehabilitation liabilities are classified as
FVTPL. Debt instruments where the contractual cash flows fail to meet the solely payments of
principal and interest (SPPI) criteria are also classified as FVTPL. A gain or loss on a debt
investment that is subsequently measured at FVTPL is recognised in profit or loss and
presented net within investment income in the period in which it arises. On derecognition of a
financial asset, the difference between the proceeds received or receivable and the carrying
amount of the asset is included in profit or loss.
Equity instruments
designated at fair value
through OCI
The group's equity investments are designated as FVTOCI. The group subsequently
measures all equity investments at fair value. Where the group's management has elected to
present fair value gains and losses on equity investments in OCI, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments are recognised when the group’s right to
receive payments is established either in profit or loss as other income or as a deduction
against the asset if the dividend clearly represents a recovery of part of the cost of the
investment. Residual values in OCI are reclassified to retained earnings on derecognition of
the related FVTOCI instruments.
Impairment losses on financial assets at amortised cost are assessed using the forward-looking expected credit loss (ECL)
approach. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (ie the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the
group expects to receive). At each reporting date, the group assesses whether financial assets carried at amortised cost are
credit impaired. A financial asset is ‘‘credit impaired’’ when one or more events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred. Trade receivable loss allowances are measured at an amount equal to
lifetime ECLs. Loss allowances are deducted from the gross carrying amount of the assets.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability
simultaneously.
Environmental trust funds Contributions are made to the group's environmental trust funds, created in accordance with statutory requirements, to fund the
estimated cost of pollution control, rehabilitation and mine closure at the end of the life of the group's mines. The trusts are
consolidated into the group as the group exercises control of the trusts. The measurement of the investments held by the trust
funds is dependent on their classification under financial assets. Income received and gains are treated in accordance with these
classifications. The equity-linked deposits and investment in unit trusts are classified and measured at fair value through profit or
loss, while the equity investments are classified and measured at fair value through other comprehensive income. Interest-
bearing short-term investments as well as investments in government bonds are classified and measured as debt instruments at
amortised cost.
Inventories Inventories, which include finished inventories (includes bullion on hand), work in process, gold in lock-up, ore stockpiles and
consumables, are measured at the lower of cost and net realisable value. Net realisable value is assessed at each reporting
date and is determined with reference to relevant market prices.
The cost of finished inventories, work in process and gold in lock-up is determined by reference to production cost, including
amortisation and depreciation at the relevant stage of production. Ore stockpiles are valued at average production cost.
Stockpiles and gold in lock-up are classified as non-current assets where the stockpile's volume exceeds current processing
capacity and where a portion of static gold in lock-up is expected to be recovered more than 12 months after balance sheet date.
Work in process inventories represent materials that are currently in the process of being converted to a saleable product.
In-process material is measured based on assays of the material fed to process and the projected recoveries at the respective
plants. In-process inventories are valued at the average cost of the material fed to process attributable to the source material
coming from the mine or stockpile plus the in-process conversion costs, including the applicable depreciation relating to the
process facility, incurred to that point in the process. Gold-in-process includes dynamic gold in lock-up, which is generally
measured from the plants onwards. Final gold in lock-up is expected to be extracted when plants are demolished at the end of
their useful lives, which is largely dependent on the estimated useful life of the operations feeding the plants.
At the group’s open pit operations, gold-in-process represents production in broken ore form.
Consumables are valued at weighted average cost value after appropriate allowances for slow-moving and redundant items.
Issued capital Ordinary shares are classified as equity, incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
The cost and number of treasury shares are eliminated against the share capital balance and total, respectively.
Provisions provisions (applicable to notes 24, 25 and 28)
Provisions are recognised when the group has a present legal or constructive obligation as a result of past events where it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate of the amount of the obligation can be made.
The amount recognised as a provision is the net present value of the best estimate of the expenditure required to settle the
present obligation at balance sheet date. It is calculated using a pre-tax rate that reflects the current market assessment of the
time value of money and the risks specific to the obligation. The estimate takes into account the associated risks and
uncertainties. The increase in the provision due to the passage of time is recognised as interest expense.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable
that an outflow of economic benefits will be required, the provision is reversed.
Provision for environmental rehabilitation Estimated long-term environmental obligations, comprising pollution control, rehabilitation and mine closure, are based on the
group’s environmental management plans in compliance with current technological, environmental and regulatory requirements.
Based on disturbances to date, the net present value of expected rehabilitation cost estimates is recognised and provided for in
full in the financial statements. The estimates are reviewed annually and are discounted using a pre-tax risk-free rate that is
adjusted to reflect the current market assessments of the time value of money and the risks specific to the obligation.
Annual changes in the provision consist of finance costs relating to the change in the present value of the provision and
inflationary increases in the provision estimate, as well as changes in estimates. The present value of environmental
disturbances created is capitalised to mining assets against an increase in the rehabilitation provision. If a decrease in the
liability exceeds the carrying amount of the asset, the excess is recognised immediately in the income statement. If the asset
value is increased and there is an indication that the revised carrying value is not recoverable, impairment is assessed in
accordance with the accounting policy dealing with impairments of non-financial assets (refer to note 2.5). Rehabilitation projects
undertaken included in the estimates are charged to the provision as incurred. The cost of ongoing current programmes to
prevent and control pollution is charged against income as incurred. Over time, the liability is increased to reflect an interest
element, and the capitalised cost is depreciated over the life of the related asset.
Leases The group assesses the presence of leases in supply contracts with external parties as at the commencement date of the
agreement. Having determined that a contract contains a lease asset (and respective contractual cash obligations), Harmony
recognises a right-of-use asset and lease liability. The group discloses expensed amounts for contracts assessed as variable
leases, low value asset leases and short-term leases. The disclosed value of these expensed leases is either determined on a
straight-line basis over the duration of the lease or on a systematic basis that fairly indicates the consumption of the lease
contract. All expensed lease contracts are recognised in production costs, corporate, administration and other expenditure in the
income statement.
The group applies the following practical expedients when assessing lease contracts:
▪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 and also applied its accounting policy on capitalisation of assets based on IAS 1 materiality
assessment
▪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
▪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 the underlying asset where it is appropriate to do so.
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
▪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 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.
26Leases continued
Accounting policy continued
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.
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.
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 the 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 mining assets and non-mining assets as part of the property, plant and equipment line
in the 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.
Contingent consideration Contingent consideration is initially recognised at fair value in accordance with IFRS 3. Changes in the fair value of the liability
subsequent to initial recognition are included in the income statement.
Streaming arrangement The streaming contract was assessed and has been accounted for as an own-use customer contract. At acquisition, the
streaming contract was initially recognised at a fair value of R1.4 billion in accordance with IFRS 3. The fair value of the contract
took into consideration the existing unfavourable gold price terms at acquisition, in relation to the comparative market gold price.
The obligation to deliver the contractually stipulated ounces over the remaining term of the agreement results in a significant
financing component. The interest accrues on the contract liability over the remaining contractual term. As the performance
obligation to deliver gold is met, the contract liability unwinds into revenue classified as "consideration from streaming contract"
in note 4.
The current portion of the liability is determined with reference to the current production profile of the operation for the next
12 months.
Financial liabilities financial liabilities (applicable to notes 30 and 31)
Financial liabilities are initially measured at fair value when the group becomes a party to its contractual arrangements.
Transaction costs are included in the initial measurement of financial liabilities, except for financial liabilities classified at fair
value through profit or loss. The subsequent measurement of financial liabilities is discussed below. A financial liability is
derecognised when the obligation under the liability is discharged, cancelled or expires. The group classifies financial liabilities
as follows:
▪Borrowings are initially recognised at fair value net of transaction costs incurred and subsequently measured at amortised
cost, comprising original debt and accrued interest less principal payments and amortisation, using the effective yield method.
Any difference between proceeds (net of transaction cost) and the redemption value is recognised in the income statement
over the period of the borrowing using the effective interest rate method. Extension options of borrowings facilities are treated
as loan commitments.
Fees paid on the establishment of the loan facilities are capitalised as a pre-payment and amortised over the period of the
facility to which it relates, to the extent it is probable that some or all of the facility will be drawn down. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is expensed.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for
at least 12 months after the balance sheet date.
▪Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method. Payables are classified as current liabilities if payment is due within a year or less. If not, they are
presented as non-current liabilities.
Trade and other payables The group accrues for the cost of the leave days granted to employees during the period in which the leave days accumulate.
Employee benefits Pension, provident and medical benefit plans are funded through monthly contributions. The group pays fixed contributions into
a separate entity in terms of the defined contribution pension, provident and medical plans which are charged to the income
statement in the year to which they relate. The group's liability is limited to its monthly determined contributions and it has no
further liability, legal or constructive, if the fund does not hold sufficient assets to pay all employees the benefits relating to
employee service in the current and prior periods. Refer to note 25 for details of the post-retirement medical benefit plan.
Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee
accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits at the earlier of the
following dates: (a) when the group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs
for a restructuring that is within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets, and involves
the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits
are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after
balance sheet date are discounted to present value.
Share-based payments The group operates the following employee share incentive plans where the group granted share options to certain employees in
exchange for services received:
▪The equity-settled Management Deferred Share Plan (DSP) initially awarded in 2020
▪The equity-settled Katleho ya Moruo ESOP scheme. Shares were issued to the Harmony ESOP Trust on 4 April 2024.
However award letters were issued to employees on 1 July 2024. Refer to critical accounting estimates and judgements
below for further details.
Equity-settled share-based payments are measured at fair value that includes market performance conditions but excludes the
impact of any service and non-market performance conditions of the equity instruments at the date of the grant. The share-
based payments are expensed over the vesting period, based on the group's estimate of the shares that are expected to
eventually vest. The group used an appropriate option pricing model in determining the fair value of the options granted. Non-
market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance
sheet date, the estimates of the number of options that are expected to become exercisable are revised.
The impact of the revision of original estimates, if any, is recognised in the income statement, with a corresponding adjustment to
equity. The proceeds received (if any) net of any directly attributable transaction costs are credited to share capital and premium
when the options are exercised.
Segment report Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker (CODM). The CODM has been identified as the Group CEO's office.