ANNUAL REPORT 2009 - ShareData · The Bank of New York Mellon Depository Receipts Division 101 Barclay Street 22nd Floor, New York New York 102386 USA . ANNUAL REPORT 2009 5 CHIEF

ANNUAL REPORT 2009

ANNUAL REPORT 2009

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CONTENTSCorporate Directory 4

Chief Executive Officer’s Report 5

Company Review 6-11

Directors’ Report 12-29

Independence Declaration 30

Corporate Governance Statement 31-36

Statement of Comprehensive Income 38

Statement of Financial Position 39

Statement of Cashflows 40

Statement of Changes in Equity 41

Notes to the Financial Statements 42-78

Directors’ Declaration 79

Independent Audit Report 80-81

Shareholder Information 82-84

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GOLD ONE INTERNATIONAL LIMITED

ANNUAL REPORT 2009

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CORPORATE DIRECTORY

Australia South Africa

Registered Office Level 3100 Mount StreetNorth Sydney NSW 2060Telephone: +612 9963 6400Facsimile: +612 9963 6499

45 Empire Road, First Floor,Parktown, Gauteng 2193South AfricaTelephone: + 27 11 726 1047Facsimile: + 27 11 726 1087

Board of Directors Non-executive DirectorsMark Wheatley (Chairman)Barry Davison (Non-Executive)Kenneth Dicks (Non-Executive)William Harris (Non-Executive)Sandile Swana (Non-Executive)Kenneth Winters (Non-Executive)

Executive DirectorsNeal Froneman (Chief Executive Officer)Christopher Chadwick (Chief Financial Officer)

Company Secretaries Kellie Pickering Pierre Kruger

Auditors PricewaterhouseCoopersDarling Park Tower 2201 Sussex StreetSYDNEY NSW 2000

Share Registry Registries Limited28 Margaret StreetSydney NSW 2000

Computershare Investor Services (Pty) Ltd70 Marshall StreetJohannesburg 2001

Solicitors Blake Dawson2 The EsplanadePerth WA 6000

Deneys Reitz8 Riebeeck Street8th floor, Southern Life CentreCape Town 8001

Bankers Commonwealth Bank of AustraliaInstitutional BankingLevel 1552 Martin PlaceSydney NSW 2000

First National BankCorporate Banking6th Floor, 4 First PlaceCorner Simmonds and Pritchard StreetJohannesburg

Stock Exchange Listings Primary ListingAustralian Securities Exchange (ASX)20 Bridge StreetSydney NSW 2000Ticker: GDO

Secondary ListingJohannesburg Stock Exchange (JSE)One Exchange SquareGwen LaneSandton 2196Ticker: GDO

American Depository Receipts OTCQX InternationalTicker: GLDZY

Level 1 ADR SponsorThe Bank of New York MellonDepository Receipts Division101 Barclay Street22nd Floor, New YorkNew York 102386 USA

ANNUAL REPORT 2009

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CHIEF EXECUTIVE OFFICER’S REPORTfor the year ended 31 December 2009

IntroductionI was appointed Chief Executive Officer (CEO) and President of Gold One International Limited (Gold One) in May 2009 following the inward listing of Gold One (formally BMA Gold Limited) on the JSE and the subsequent acquisition of all the issued shares in Aflease Gold Limited (Aflease Gold), a South African domiciled company. The transaction resulted in Gold One holding primary listings on both the ASX and the JSE.

The year under review represented a watershed year for the company with the achievement of several significant milestones. During the year ahead Gold One will focus primarily on delivering on its production targets at Modder East and on increasing its reserves and resources.

Business concept Gold One’s strategy is to provide superior returns to investors in global markets supportive of junior gold mining companies and it will achieve this by exploring, developing and mining shallow, low technical risk, high margin resources in mining friendly jurisdictions while actively reviewing opportunities in its preferred jurisdictions, namely Australia, North America and Southern Africa.

AchievementsGold One achieved several significant milestones during 2009. Foremost was the declaration of commercial production at Modder East in December 2009 following the first gold pour on 21 July 2009 from Modder East ore as well as the successful commissioning of the new metallurgical plant in May 2009.

Modder East is expected to generate strong cash-flows from 2010 onwards as it ramps up to full production of 150,000 to 180,000 ounces of gold at less than U$300 per ounce cash costs and U$100 per ounce capital costs at steady state.

A contributing factor to the successful ramp up at Modder East has been the establishment of an underground training centre at Sub Nigel which provides fully trained teams who are able to start productive mining at Modder East immediately.

It is gratifying that the operational results at both Modder East and Sub Nigel have been achieved with an excellent safety record and with a lost time injury frequency rate (LTIFR) of 1.14 per 200 000 man hours which compares well with the Australian benchmark and is also significantly better than the South African benchmark.

ExplorationGold One has a significant project pipeline with prospecting rights adjoining the Modder East and Sub Nigel mining rights and at Ventersburg in the Free State. During 2009, exploration was focused primarily on Ventersburg where the shallow ore body is a perfect fit to the company’s strategy of exploring, developing and mining shallow, low technical risk high margin ore bodies. The company has commenced with a scoping study at Ventersburg.

Financing Gold One successfully raised A$37.700 million by way of a share placement in August 2009 at A$0.3148 cents per share to fund exploration, corporate growth projects and a partial redemption and cancellation of the convertible bonds in issue. The placement also provided working capital flexibility as the funding of exploration and

corporate growth projects was scaled back in the fourth quarter to offset the slightly lower than forecast gold production.

As a result of the put option the convertible bondholders have to redeem their bonds in December 2010, the company appointed a financial adviser to assist in securing alternative funding to place Gold One in a position to redeem the bonds should the bondholders exercise their put option. This process is underway and it is expected that the alternative funding will be in place by mid-2010.

People Gold One embarked on a recruitment drive in 2009 increasing the number of employees from 272 to 933 at the end of the year. The company continues to strive towards creating an environment that will attract high calibre individuals who thrive in a challenging, self motivating no frills working environment where team work and mutual respect are fundamental.

I would like to express my appreciation to the many loyal shareholders whose support during the past year has been so important and to welcome our new shareholders to this exciting time of growth. I would also like to thank my fellow board members, management and all Gold One employees for their hard work, dedication and commitment to the company as well as the support that they have given me in my first year as CEO.

Neal FronemanChief Executive Officer and President

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COMPANY REVIEWfor the year ended 31 December 2009

Gold One is an Australian and African gold producer listed on the financial markets operated by the ASX and the JSE (issuer code GDO). The company was created by way of the inward listing of Gold One on 18 May 2009 on the JSE and the subsequent acquisition by Gold One of all the issued ordinary shares in Aflease Gold by way of a scheme of arrangement.

During the year under review the company achieved a number of milestones, culminating in the declaration of commercial and continuous production at the company’s Modder East operation on 1 December 2009. For the year, Gold One produced 17,040 ounces of gold and in the first month of commercial production achieved cash costs of U$593/oz.

Location of assetsThe company’s assets are located in Southern Africa and all of the declared resources are located in South Africa, while the company has exploration assets in Mozambique (Tulo) and Namibia (Etendeka).

Current Tenement Status In Southern Africa

Project Location Type DMR Reference Date Granted Period of Right Hectares

Sub Nigel 1 Gauteng, South Africa Mining Licence GP (28) MR 15 Jul 2008 30 years 3013,3142

Sub Nigel 4 & 5 Gauteng, South Africa Prospecting Right GP (45) PR 28 Oct 2005 5 years 2643,3942

Sub Nigel 6 Gauteng, South Africa Prospecting Right GP (142) PR 1 Jun 2006 5 years 3860,5435

Sub Nigel 8 Gauteng, South Africa Prospecting Right GP(260) PR 29 May 2007 5 years 6540,7174

Ventersburg 1 Free State, South Africa Prospecting Right FS (24) PR 15 Nov 2006 5 years 9757,8000

Ventersburg 2 Free State, South Africa Prospecting Right FS (477) PR 16 Apr 2008 5 years 2842,0614

Ventersburg 3 Free State, South Africa Prospecting Right FS (565) PR 31 Mar 2009 5 years 416,0100

Bothaville Free State, South Africa Prospecting Right FS (482) PR 16 Apr 2008 5 years 8514,1025

Turnbridge Gauteng, South Africa Prospecting Right GP (31) PR 1 Jun 2006 5 years 1315,4880

Holfontein Gauteng, South Africa Prospecting Right GP (139) PR 1 Jun 2006 5 years 2180,5

Modder East Gauteng, South Africa Mining Licence ML 15/2004 30 Apr 2004 5 years # 3263,7643

Modder East Gauteng, South Africa Mining Permit GP (98) MP 10 Apr 2008 2 years 1,5

Etendeka Kunene Region, Namibia Prospecting Licence EPL 3377 13 Dec 2008 2 years 65685,0

Tulo Niassa Province, Mozambique Mining Concession MC 557C 28 Mar 2006 25 years 21760,0

#: In terms of the Mineral and Petroleum Resources Development Act 28 of 2002, the company, prior to the expiry of the existing license, lodged a conversion application with the Department of Mineral Resources. The existing license accordingly remains valid until the conversion application is granted.

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Reserves and ResourcesGold One has a declared resource base of 4.38m ounces in the Indicated Resource and 9.29m ounces in the Inferred Resource categories. The company has a declared Probable Mineral Reserve (Probable Ore Reserve as per JORC definition) of 1.36m ounces. Although mineral resources and mineral reserves are reported in accordance with SAMREC guidelines, estimates would be identical if reported in accordance with JORC standards.*

A breakdown of the resources is provided in the table below.

Gold One International Consolidated Mineral Resource Statement

Tonnes (Mt) Grade (g/t) Gold Content (Moz)

Indicated

Modder East1,2 28.83 2.84 2.63

Sub Nigel 2 2.98 3.21 0.31

Ventersburg3 8.73 5.12 1.44

Total Indicated 40.54 3.36 4.38

Inferred

Modder East2 14.98 2.16 1.04

Sub Nigel and Spaarwater2 2.39 4.89 0.38

New Kleinfontein and Turnbridge4 4.27 6.00 0.83

Ventersburg3 13.48 4.24 1.84

Sub Nigel 63 48.25 3.39 5.20

Total inferred 83.37 3.48 9.29

Total indicated and inferred 123.91 3.44 13.67

1 Mineral Resources are quoted inclusive of Mineral (Ore) Reserves 2 Signed-off by Minxcon, independent resource consultants to Gold One, audited by SRK3 Signed-off by Minxcon, independent resource consultants to Gold One4 Signed-off by Camden Geoserve, independent resource consultants to Gold One, audited by SRK5 Resources are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC)

Tonnes (Mt) Grade (g/t) Gold Content (Moz)

Probable

Modder East

BPLZ 5.39 6.09 1.06

UK9A 2.26 4.13 0.30

Total Probable 7.65 5.51 1.36

1 ZAR6.585=U$1.00, gold price = U$629/oz2 Reserves are reported in accordance with SAMREC guidelines (estimates would be identical if reported in accordance with JORC)

Operational reviewSafetyFor the 2009 year, the company achieved a LTIFR of 1.14 per 200,000 hours, which positions Gold One well against the Australian benchmark of 1 lost time injury per 200,000 hours worked. This safety performance significantly exceeds the South African 2013 tripartite “Safety Targets and Milestones”.

Modder EastThe company’s focus in 2009 was bringing Modder East into production. The Modder East mine is situated on the East Rand in the Gauteng Province of South Africa, approximately 30 kilometres to the east of Johannesburg, and is located in one of South Africa’s richest historic gold mining districts. The project consists of the Modder East and UC Prospect areas, where the Black Reef and the UK9a Kimberley Reef have been identified.

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The Modder East mine comprises a shallow underground mine (300 metres to 530 metres below surface) with a dedicated Carbon in Leach gold treatment facility with a production capacity of 70,000 tonnes per month. This capacity is being increased to 100,000 tonnes per month and should be completed by the middle of 2010.

The mine is serviced by a 345 metre deep vertical shaft and a 2.2 kilometre long decline. The shaft will be used for crews and ventilation and the decline for rock hoisting and material transport.

On 21 July 2009, following intersection of the reef in May of 2009 in the decline, Gold One announced that it had poured its first 240 ounces of gold from underground Modder East ore, well ahead of schedule. This first pour followed on from the successful commissioning of the Modder East plant in May 2009 using low grade third party surface material. Since production began and up to 31 December 2009, the date of this review, 17,040 ounces of gold have been produced, of which 10,865 ounces were produced in the fourth quarter.

Modder East Gold Production

12000

10000

8000

6000

4000

2000

0

Qtr 1 2009 Qtr 2 2009 Qtr 3 2009 Qtr 4 2009

Ounces

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Key performance data

Fourth Quarter - 2009 Modder East Modder Surface Sub Nigel

Ore mined underground 47,469 - 13,751

Mined grade 9.16 0.66 1.68

Milled Tonnes 46,661 8,193 11,940

Recovered grade 6.88 0.37 1.16

Plant recovery 93% 59% 92%

Gold produced 10,323 97 445

Cash Operating cost U$ 593/oz

Gold sold 10,311 871

Average price received (U$ / oz) 1,113 1,113

Sub NigelHistorically, the Sub Nigel mine produced 15 million ounces of gold from the Nigel Reef between 1909 and 1971. A total of 29.7 million tonnes of ore at an average head grade of 15.7g/t were milled during this period. The 900 metre deep Sub Nigel 1 Shaft on the property was recently re-commissioned and licensed.

Sub Nigel is Gold One’s purpose built training facility, aimed at equipping crews with the right tools and culture needed to make Modder East a successful operation. Previously on care and maintenance, re-commissioned at a cost of less than US$3 million, the training centre entrenches the basic principles of mining and allows for complete teams to be fully trained before being moved to Modder East. Sub-Nigel’s costs are included as part of the Modder East cost base. The training centre mined 38,729 tonnes at a grade of 2.03g/t during 2009, producing 1,744 ounces of gold.

Guidance for 20102010 gold production for both Modder East and Sub Nigel is estimated to be between 100,000 and 120,000 ounces at average cash costs for 2010 below U$ 400/oz.

Sale of non-core assetsOn 1 July 2009, the company announced that it had sold its Twin Hills project in North Queensland to North Queensland Metals Limited and Heemskirk Consolidated Limited (in proportions of 60% and 40%, respectively) for A$1.75 million. The asset sale is for cash, payable in 4 installments. The sale of the Twin Hills project is in line with Gold One’s strategy of realising value from non-core assets, as the company pursues organic growth through the development of its core gold projects.

Exploration

Free State MozambiqueNamibia Gauteng

Project Locations

Exploration Feasibility Development Production

Etendeka

Bothavilla

TuloSub Nigel 2,3

Ventersburg

Spaarwater Vlakfontein

WestVlakfontein

MegaMine

Turnbridge

ModderEast North

NewKleinfontein

Modder East

SubNigel 1

ERBP

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Gold One has a healthy pipeline of exploration projects. For the year under review, a total of A$3.885 million was spent on exploration, focused mainly on the company’s Ventersburg project in the Free State.

The 2009 Ventersburg drilling program was completed in December, with a total of 12,814 metres drilled at the project. The exploration program will continue in 2010 and modeling using available data is continuing. Drilling is aimed at extending the current resource area as well as some infill drilling to enhance confidence in the resource estimation. The first draft of a scoping study report by Turgis Consulting, who have been engaged to undertake the pre-feasibility study, has been received. Turgis was the technical consultant to Gold One’s Modder East project from scoping study through to bankable feasibility study. Ventersburg has a JORC/SAMREC compliant indicated resource of 1.44 million ounces at 5.1 g/t, and an additional inferred resource of 1.84 million ounces at 4.24 g/t*.

The East Rand Boundary Project (ERBP) comprises a number of shallow and easily accessible resources, some with existing infrastructure. Gold One believes that these projects have a two year lead time and may have as much as a five year life of mine with the potential to deliver around 1,000 ounces of gold per month to the Modder plant.

The Mega Mine project is an area covering 16,058 hectares over which Gold One has secured contiguous prospecting rights. Deeper than Modder East or Ventersburg, Mega Mine comprises two reef horizons, namely the Main Reef and the Big Pebble Marker. Some infrastructure exists, including a vertical shaft, which is not equipped. Importantly, this project is not linked to the East and Central Rand Water Basins. At this stage, the company has a declared, SAMREC/JORC compliant resources of 5.58 million ounces* at 3.46 g/ton in the inferred category and 0.31 million ounces* at 3.21 g/ton in the indicated category.

Gold One has initiated a geological modeling desktop study which will include an updated structural and sedimentological model. The modelling is aimed in better understanding the Main Reef and associated mineralisation distribution, which occurs at depths shallower than 2,500 metre below surface. The modelling will also provide more information on the Big Pebble Marker Reef, located from approximately 600 metre below surface. The Mega-Mine project has been initiated to determine how these assets can provide the best value creation for Gold One shareholders.

Capital raiseGold One announced on 24 June 2009 that it had resolved to raise A$37.700 million, with the placement going to predominantly Australian and international institutional investors; 120 million ordinary shares at ZAR 2.03338/A$ 0.3148 per share were issued. The funds raised were applied to a number of initiatives:

- drilling and feasibility studies at the Ventersburg Project;

- corporate growth initiatives;

- working capital and the costs of the capital raising; and

- partial redemption and cancellation of the Gold One convertible bonds.

*COMPETENT PERSONThe information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Dr. Richard Stewart, PhD, Pr.Sci.Nat. Vice President, Geology, Gold One, who is a Member of the Geological Society of South Africa. Dr Stewart is a full-time employee of Gold One. He has 10 years experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person for the purposes of both the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and the ‘South African Code for Reporting of Mineral Resources and Mineral Reserves’. Dr Stewart consents to the inclusion in this presentation of the matters based on information compiled by Gold One employees and its consultants in the form and context in which they appear. Further information on the company’s resource statement is available in the pre-listing statement of Gold One International Limited issued on 19 December 2008.

SAMREC and JORC TERMINOLOGY In addition, this report uses the terms “indicated resources” and “inferred resources” as defined in accordance with the SAMREC Code (South African Code for Reporting of Mineral Resources and Mineral Reserves prepared by the South African Mineral Resource Committee) (SAMREC) under the auspices of the South African Institute of Mining and Metallurgy effective 2007 or as amended from time to time and where indicated in accordance with the Canadian National Instrument 43-101 – Standards for Disclosure for Mineral Projects. The terms “indicated resources” and “inferred resources” are also defined in the 2004 Edition of the JORC Code (Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves) prepared by the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC). The use of these terms in this report is consistent with the definitions of both the SAMREC Code and the JORC Code.

A mineral reserve (or ore reserve in the JORC Code) is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate at the time of reporting that economic extraction can be justified. A mineral (ore) reserve includes diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve (or proved ore reserve in the JORC Code) is the economically mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve (or probable ore reserve in the JORC Code) is the economically

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mineable part of an indicated mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit.

A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilised organic material in or on the earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological char-acteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited exploration and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Investors are cautioned not to assume that all or any part of the mineral deposits in the measured and indicated resource categories will ever be converted into reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will be ever be upgraded to a higher category. Under South African and Australian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except under conditions noted in the SAMREC Code and the JORC Code, respectively.

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DIRECTORS’ REPORTYour directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Gold One and the entities it controlled at the end of, or during, the period ended 31 December 2009.

1. DIRECTORSThe names and details of the directors of the company in office during the financial year:

Name

Gold One (formerlyBMA Gold) date of

appointmentAflease Gold

date of appointment Date resigned or retired

Gold Onedate of appointment

or re-appointment

Mark Wheatley 10 July 2006 - 27 May 2009 27 May 2009

Neal Froneman 14 April 2009 10 January 2006 27 May 2009 27 May 2009

Christopher Chadwick - 01 July 2008 - 25 May 2009

Barry Davison - - - 25 May 2009

Kenneth Dicks - 10 January 2006 - 25 May 2009

Sandile Swana - 8 July 2005 - 25 May 2009

William Harris - - - 25 May 2009

Kenneth Winters 2 August 2005 - 27 May 2009 27 May 2009

William O’Keeffe 25 November 2003 - 14 April 2009 -

Mark Kenneth Wheatley – Non-executive Chairman – BE (Chem Eng Hons 1), MBAMr Wheatley was Chief Executive Officer of Toronto listed uranium miner, Southern Cross Resources Inc from September 2003 to December 2005 and chairman from June 2004 to December 2005. He still serves as a non-executive director on the board of this company, which was renamed Uranium One Inc. Prior to 2003, Mr Wheatley was General Manager Corporate Development for Aurion Gold Limited (previously Goldfields Limited), and prior thereto, he served as Senior Vice President within the global mining team of Bankers Trust Australia Limited. Mr Wheatley started as a trainee for BHP at Port Kembla Steelworks in 1979 and worked in a number of technical and commercial roles with BHP through to 1996. Mr Wheatley also served as non-executive director of St Barbara Limited from November 2003 to August 2006, and was appointed a non-executive director of Norton Goldfields Limited in March 2010. He serves as chairman of the Corporate Governance and Nominating Committee and is a member of the Safety, Health, Environment and Sustainable Development Committee.

Neal John Froneman – Chief Executive Officer – BSc (Mech Eng), BComptMr Froneman is a registered professional engineer also holding a South African Mine Managers Government Certificate of Competency for metaliferous mines and a South African Mine Engineers Government Certificate of Competency and has over 30 years experience in the mining industry in gold, platinum and coal. He was appointed Chief Executive Officer of Aflease Gold and Uranium Resources Limited in April 2003 and was primarily responsible for the creation and development of Uranium One Inc until his resignation from Uranium One Inc. in February 2008. During this period Mr Froneman was chief executive officer of both Aflease Gold Limited and Uranium One Inc. Prior to joining Aflease, he was vice president and head of operations at Gold Fields Limited, and has also held management and executive positions at Harmony Gold Mining Company Limited, JCI Limited and other companies. Mr Froneman serves on the Safety, Health, Environment and Sustainable Development Committee.

Christopher Damon Chadwick – Chief Financial Officer – B.Compt (Hons), CTA, CA(SA)Mr Chadwick is a qualified Chartered Accountant. Prior to joining Aflease Gold in July 2008, he held executive positions in a wide range of industries, both with local South African companies and multinationals.

Barry Erskine Davison – Non-executive Director – BAMr Davison is one of the pre-eminent mining executives in Southern Africa, with over 40 years’ experience in the industry. He served as director of several companies, including Anglo American plc, Nedbank Group and chaired Anglo American Platinum Corporation Limited from 2001 to 2006. Mr Davison serves as a member of the Corporate Governance and Nominating Committee and is the chairman of the Remuneration Committee.

Kenneth Victor Dicks – Non-executive DirectorMr Dicks retired from the Anglo American Corporation in 1997 after 37 years of service. He has a total of 39 years of experience in the mining industry, 37 of which were spent in gold mining. He served in various senior management positions as well as on mining companies’ boards namely Freegold , Western Deep Levels and Elandsrand. He previously served as a non-executive director on the Aflease Gold and Uranium Resources Limited board and currently serves on the Harmony Gold board. Mr Dicks serves as a member of the Corporate Governance and Nominating Committee and chairs the Safety, Health, Environment and Sustainable Development Committee.

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William Bruce Harris – Non-executive Director – BA, MBAMr Harris is a partner of Solo Management Group LLC and has held senior executive positions including President and CEO of Hoechst Fibers Worldwide. Mr Harris is also a director of EMC Metals Corp., Golden Predator Royalty & Development Corp. and Potash One Inc. He serves on both the Audit and Remuneration Committees.

Sandile Swana – Non-executive Director – BCom, MBAMr Swana is the Chairman of Kabusha Mining and Finance and former chairman of Sub Nigel Gold Mining Company Limited. He is a graduate of the Anglo American Corporation Cadet Scheme and has worked for multi-nationals Caltex Oil and the New York Times. He serves as a member of the Safety, Health, Environment and Sustainable Development Committee and the Audit Committee.

Kenneth John Winters – Non-executive Director – BComMr Winters was appointed on 2 August 2005. He has held positions at an operational level and in finance and commercial aspects of a number of listed mining companies since 1979. He formerly held a position of Chief Financial Officer for Highlands Gold Limited and Chief Financial Officer and Company Secretary for Mt Lyell Mining Company Limited and CBH Resources Limited. He serves as Chairman of the Audit Committee and is a member of the Remuneration Committee.

2. DIRECTORS’ MEETINGSThe number of meetings of directors (including committee meetings ) held during the year and the number of meetings attended by each director whilst they were directors is as follows:

Full meetings of Directors

Meetings of committees

Audit Remuneration Safety Governance

A B A B A B A B A B

M K Wheatley 4 4 ** 3 ** 3 3 3 3 3

N J Froneman* 3 3 ** 3 ** 3 3 3 ** 3

C D Chadwick* 3 3 ** 3 ** 3 ** 3 ** 3

B E Davison 2 3 ** 3 3 3 ** 3 3 3

K V Dicks 3 3 ** 3 ** 3 3 3 3 3

W B Harris 3 3 3 3 3 3 ** 3 ** 3

S Swana 2 3 2 3 ** 3 3 3 ** 3

K J Winters 4 4 3 3 3 3 ** 3 ** 3

W O’Keeffe 1 1

A = Number of meetings attended

B = Number of meetings held during the time the director held office or was a member of a committee during the year.

* = Executive director

** = Not a member of the relevant committee

The Constitution requires that any two directors be present at a Board of Directors meeting to form a quorum.

3. COMPANY SECRETARIESPierre Kruger (BCom, LLB, H Dip Company Law)

Mr. Kruger was appointed the company secretary of the Aflease Gold in January 2007 and as company secretary of Gold One on 25 May 2009. Prior to his appointment as company secretary, he served as a non-executive director on the Aflease board. He also practised as an attorney, conveyancer and notary public for a period of 26 years.

Kellie Pickering BCom (Merit), CA (Aus)

Ms Pickering was appointed as a company secretary of Gold One on 21 July 2009. Ms Pickering joined the former BMA Gold Limited, now Gold One International, as manager of accounting and finance in January 2008. She has held senior finance positions in a wide range of industries in Sydney and London and has diverse experience with local Australian companies and multinationals including: AAPT Limited, Ernst & Young (Sydney and London), Enron Corporation, and Walt Disney International. Ms Pickering qualified as a chartered accountant with Ernst & Young in 1999.

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4. PRINCIPAL ACTIVITY AND NATURE OF OPERATIONSGold One is an Australian and African gold resource company listed on the financial markets operated by the ASX and the JSE (issuer code GDO). It has been developing the new Modder East mine which went into commercial production on 1 December 2009 on the East Rand, some 30 kilometres from Johannesburg, and also owns the nearby existing Sub Nigel mine, which has recently been recommissioned. Its other projects and targets include Ventersburg and Bothaville, both in the Free State goldfields, the Tulo concession in Mozambique and the Etendeka greenfields project in Namibia. Other than the foregoing and as referred to in the Company Review on pages 6 to 11, there were no significant changes in those activities during the financial year.

5. OPERATING AND FINANCIAL REVIEWThe Company Review commencing on page 6 to 11 of this Annual Report provides the Operating Review of the Group during the year and subsequent to the reporting date.

Operating Results for the YearThe net loss after tax for the year ended 2009 for the consolidated entity was A$26.070 million (2008: loss A$6.483 million). This was largely due to forex losses incurred as a result of conversion of the South African rand denominated convertible bonds to the US dollar denominated convertible bonds as well as acquisition costs and goodwill impairment as a result of the reverse acquisition of BMA Gold. These costs are included in the general and administration costs of A$15.502 million (2008: A$3.344 million) and other expenses of A$9.057 million (2008: A$98 thousand income). In addition, the rise of the general and administration costs was due to the mine nearing production phase, which commenced on 1 December 2009. More details of the costs incurred are provided in notes 5 and 6 of the notes to the financial statements. Finance income saw a decline from A$9.260 million in 2008 to A$1.822 million in 2009 as a result of the lower cash balances throughout the period under review. The finance costs decreased from A$7.711 million to A$7.264 million, largely, as a result of a reduction in interest payments brought on by the repayment of a portion of the convertible bonds.

Headline loss for the period is the loss per period adjusted for profits and/or losses attributable to once-off expenses and capital gains or losses. The disclosure of headline earnings or loss per share is a requirement of the JSE.

Consolidated

2009 2008

Headline loss per share (0.03) (0.01)

Calculated based on:

Weighted average number of fully paid ordinary shares 645,254,632 527,381,180

Loss attributable to members of parent (21,089,000) (6,483,000)

Reconciliation of basic loss and headline loss for the period:

Loss for the period (26,070,000) (6,483,000)

Impairment of assets 5,226,000 -

Gain on sale of assets (245,000) -

Headline loss for the period (21,089,000) (6,483,000)

Share Issues during the perioda) Shares issued on scheme of arrangement (684,669,016 – non cash);

b) Exercise of listed options (60 shares at A$ 0.50 cents);

c) Share placement (120,000,000 shares at A$ 0.3148 cents);

d) Shares issued in respect of Tulo acquisition (230,240 shares at ZAR 2.172 – non cash); and

e) Exercise of options (67,500 shares at ZAR 1.35; 60 shares at A$ 0.50 cents).

The Company raised A$37.700 million from the issue of 120,000,000 shares during the year.

6. DIVIDENDSNo amounts have been paid or declared by the company by way of dividends since the commencement of the financial year.

ANNUAL REPORT 2009

15

7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRSRefer to the Company Review on page 6 to 11. In the opinion of the directors, there were no other significant changes in the state of affairs of the Group that occurred during the year under review.

8. EVENTS SUBSEQUENT TO YEAR ENDRefer to the Company Review on pages 6 to 11. In the opinion of the directors, no other matter or circumstance has arisen since 31 December 2009, other than initiatives by Gold One dealing with the possibility of the bondholders exercising their right of put, the re-purchase of 38 convertible bonds and the amendment of the status of Gold One on the Main Board List of the JSE from a primary listing to a secondary listing. In the December quarterly review, Gold One reported that it had proactively initiated a process to pursue the implementation of a bank debt facility and has engaged advisors with regards to this process. The facility is intended to provide Gold One with sufficient liquidity to meet the potential obligation arising from the put option at the election of the bondholders in December 2010. This process has resulted in Gold One selecting two banks from a short list of four banks, one South African and one international, to finalise a debt facility. The successful close of the facility will be subject to agreeing final terms and conditions with the banks as well as the banks obtaining final internal approvals. For avoidance of doubt the proposed facility does not contain an equity component.

9. LIKELY DEVELOPMENTS, FUTURE BUSINESS STRATEGIES AND PROSPECTSComments on expected results of certain operations of the Group are included in this Annual Report under the Company Review on page 6 to 11. Further information about the likely developments in the operations of the Group in future years and the expected results of those operations has been omitted from this Directors’ Report because disclosure of the information is, in the directors’ opinion, likely to result in unreasonable prejudice to the Group.

10. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation but are subject to numerous environmental regulations in South Africa, including the Atmospheric Pollution Prevention Act (No. 45 of 1965), Environment Conservation Act (No. 73 of 1989), National Water Act (No. 45 of 1965) and National Environmental Management Act (No. 107 of 1998). The board believes that the Group has adequate systems in place for the management of environmental regulations and is not aware of any breach of those environmental requirements as they apply to the Group.

11. DIRECTORS’ INTERESTSAt the date of this report, the interests of the directors in the shares of the company and related bodies corporate are:

Director Number Directly Held Number Indirectly Held

M K Wheatley

Ordinary SharesUnlisted Options*Listed Options*

- 2,000,000

-

392,500375,000

6,000

N J Froneman

Ordinary SharesUnlisted Options*Single Stock Futures

170,0006,877,743

-

--

3,700,000

C D ChadwickOrdinary SharesUnlisted Options*

-3,740,645

--

B E DavisonOrdinary SharesUnlisted Options*

-450,000

--

K V DicksOrdinary SharesUnlisted Options*

-890,171

--

W B HarrisOrdinary SharesUnlisted Options*

-450,000

--

S SwanaOrdinary SharesUnlisted Options*

50,000890,171

--

K J Winters

Ordinary SharesUnlisted Options*Listed Options*

77,0021,175,000

23,101

81,250--

* 11,529,302 options have vested and are exercisable as at the date of this report.

16


12. SHARE OPTIONS GRANTED TO DIRECTORS AND EXECUTIVESOptions over unissued ordinary shares of Gold One granted during or since the end of the financial year to directors and executives of the Group as part of their remuneration packages were as follows:

Executive Share options granted as part of remuneration Replacement options granted*

M K Wheatley 1,500,000 -

N J Froneman - 6,877,743

C D Chadwick - 3,740,645

B E Davison 450,000 -

K V Dicks 250,000 640,171

W B Harris 450,000 -

S Swana 250,000 640,171

K J Winters 800,000 -

I J Marais - 4,654,566

S Caddy 1,067,000 -

P B Kruger 478,000 2,339,977

* Replacement options in Gold One were issued in lieu of options held by employees of Aflease in conjunction with the BMA Gold/Aflease scheme of arrangement. The replacement options replace options granted to these employees over a number of years as part of their employment arrangements.

Unissued sharesAs at 31 December 2009, there were 6,562,498 listed and 53,607,549 unlisted share options outstanding that if exercised would result in the issue of 60,170,047 new shares in Gold One. Refer to note 29 of the financial statements for further details of the options outstanding.

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company, unless the option holder exercises that option and becomes the holder of Gold One shares prior to the record date for the issue of the shares.

Shares issued as a result of the exercise of optionsThe following ordinary shares in Gold One were issued during the year ended 31 December 2009 on the exercise of options. No further shares have been issued since that date. No amounts are unpaid on any of the shares.

Date options granted Issue price of shares Number of shares issued

15/3/2005 ZAR 0.65 2,800,000

12/11/2008 ZAR 1.35 67,500

3/12/2007 A$ 0.50 60

2,867,560

13. INSURANCE AND INDEMNITIES OF DIRECTORS AND OFFICERSDuring the financial year, the Group paid a premium of A$38,261 to insure the directors and secretaries of the company and its Australian-based controlled entities, and the general managers of each of the divisions of the Group.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for them or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. Directors may obtain independent professional advice at the expense of the company.

Under the Gold One Constitution, the company, to the extent permitted by the Corporations Act 2001 (Cth), Trade Practices Act 1974 (Cth) and any other applicable law, indemnifies every officer of the company and its wholly owned subsidiaries, and may indemnify its auditor, against a liability incurred as such an officer or auditor, unless the liability arises out of conduct involving a lack of good faith. The company may make a payment in respect of legal costs incurred by an officer or employee or auditor in defending an action for a liability incurred as such an officer, employee or auditor or in resisting or responding to actions taken by a government agency or a liquidator.

ANNUAL REPORT 2009

17

14. REMUNERATION REPORTThis report presents the remuneration arrangements in place for directors and executives of the Group in accordance with the requirements of the Corporations Act 2001 and its regulations.

For the purposes of this report, the terms ‘directors’,‘executive’ and ‘key management personnel’ include the following:

Mark Wheatley Chairman (non-executive)

Neal Froneman Chief Executive Officer

Christopher Chadwick Chief Financial Officer

Barry Davison Director (non-executive)

Kenneth Dicks Director (non-executive)

William Harris Director (non-executive)

Sandile Swana Director (non-executive)

Kenneth Winters Director (non-executive)

William O’Keeffe Resigned 14 April 2009

Izak Marais Snr Vice President: RSA Operations

Syd Caddy Snr Vice President: Projects

Pierre Kruger Company Secretary

There were no changes to key management personnel after the reporting date and before the date the financial report was authorised for issue. The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001 (Cth).

Principles used to determine the amount and nature of remuneration

The performance of the company depends upon the calibre of its directors and executives.

The following principles are included in its remuneration framework to ensure maximum stakeholder benefits:

• Providecompetitiveremunerationpackagetoattractandretainhighcalibreexecutives;

• Haveaportionofexecutiveremuneration‘atrisk’,dependentuponmeetingpre-determinedserviceperiodsandperformancebenchmarks;

• Reassesstheappropriatenessofthenatureandamountofexecutiveemolumentsperiodicallybyreferencetorelevantemploymentmarket conditions;

• Transparency;and

• Capitalmanagement.

In consultation with external remuneration consultants, the Group has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the organisation.

Alignment to shareholders’ interests:

• haseconomicprofitasacorecomponentofplandesign;

• focusesonsustainedgrowthinshareholderwealth,consistingofdividendsandgrowthinshareprice,anddeliveringconstantreturnonassets as well as focusing the executive on key non-financial drivers of value; and

• attractsandretainshighcalibreexecutives.

Alignment to program participants’ interests:

• rewardscapabilityandexperience;

• reflectscompetitiverewardforcontributiontogrowthinshareholderwealth;

• providesaclearstructureforearningrewards;and

• providesrecognitionforcontribution.

The framework provides a mix of fixed and variable pay, and a blend of short- and long-term incentives. As executives gain seniority within the group, the balance of this mix shifts to a higher proportion of ‘’at risk’’ rewards.

Non-executive Directors’ feesThe initial base remuneration was fixed with effect from 25 May 2009 and is inclusive of committee fees. In November 2009 the board following a comprehensive review of fees paid to non-executive directors in companies of comparable size increased the fees with effect from the 1 January 2010.

18


The following fees apply:

Title From 25 May 2009 From 1 January 2010

Non-executive Chairman A$60,000 A$130,000

Audit Committee Chairman A$40,000 A$80,000

Non-executive directors A$20,000 A$60,000

Remuneration CommitteeThe board has established a Remuneration Committee which provides advice on remuneration and incentive policies and practices and specific recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors. The corporate governance statement provides further information on the role of this committee.

Remuneration structureIn accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is separate and distinct.

Non-executive director remuneration

Structure

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors.

The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by Gold One’s shareholders in a general meeting. An amount not exceeding the amount determined is then divided between the directors as agreed. The latest determination was at a general meeting of shareholders held on 21 January 2009 when shareholders approved an aggregate remuneration of A$500,000 per year to reflect the expanded size of the Gold One board and the resulting need to remunerate a greater number of directors.

The board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and retain directors of high calibre, whilst incurring a cost that is acceptable to shareholders.

The amount of aggregate remuneration approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The board considers advice from external consultants as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.

The board considers that having regard to the size and maturity of the Group, it is appropriate that non-executive directors be remunerated by means of a combination of a modest cash fee and options. The policy of granting non-executive directors share options will be reviewed by the board on an annual basis.

Executive remuneration

Objective

The Group aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Group so as to:

• RewardexecutivesforGroupandindividualperformanceagainsttargetssetbyreferencetoappropriatebenchmarks;

• Aligntheinterestofexecutiveswiththoseofshareholders;and

• Ensuretotalremunerationiscompetitivebymarketstandards.

Structure

Remuneration for executives is structured at a level that is market competitive and consistent with best industry practice as well as supporting the interests of shareholders and has the following components:

• Basepayandbenefits;

• Shorttermperformanceincentives;and

• Longtermperformanceincentivesthroughparticipationinemployeeoptionplans.

Base pay is structured as a total employment cost package that may be delivered as a combination of cash and prescribed non-financial benefits at the executive’s discretion. Base pay for executives is reviewed annually to ensure that the executive’s pay is competitive with the market. An executive’s pay is also reviewed on promotion. There are no guaranteed base pay increases included in any executives’ contract.

Each executive has a short term incentive opportunity depending on the accountabilities of the role and impact on group performance. The maximum target bonus opportunity is 60% and 50% of base pay for the CEO and senior vice presidents respectively. For the period under review, the key performance indicators were based on financial, mining, and corporate development areas and were set individually across the executive team.

ANNUAL REPORT 2009

19

The performance objectives were set having regard to the current development status of the company and will change as the company moves from being a developer to a production company. The board currently attaches significant weight to the attainment of the development and production targets at the Modder East operations and the performance objectives are weighted accordingly.

The Remuneration Committee is responsible for determining whether the performance objectives have been met. The committee receives detailed information from management and external consultants to assist in making this assessment. Short term incentive payments may be adjusted up or down in line with under or over achievement against the target performance levels and this is at the discretion of the committee.

Long term incentives are provided to certain employees via the Gold One International Share Incentive Plan approved by shareholders on 26 August 2009. The Plan fixes the maximum number of options that may be granted to any one employee of the Group as well as the terms and conditions upon which options may be granted. The Plan further provides that upon termination of employment, all unvested options immediately lapse and the vested options must be exercised within 6 months of termination of employment failing which they lapse. The number of options to be granted to any one employee is determined by the board on recommendation from the Remuneration Committee.

Details of the nature and amount of each element of the emolument of each director of the company and each key management person of the company for the financial year follow. This list includes the five highest remunerated persons in the group as required by the Corporations Act 2001.

Table 1: Group directors’ and executives remuneration for the year ended 31 December 2009

Short Term Post EmploymentShare based

payments

Salary and/or Fees Cash Bonus Super-annuation Equity Options Total

A$ A$ A$ A$ A$

Executive Directors

N J FronemanChief Executive Officer

2009 363,275 148,027 - 159,563 670,865

2008 301,571 - - - 301,571

C D ChadwickChief Financial Officer

2009 257,320 46,374 - 68,013 371,707

2008 110,253 - - - 110,253

Subtotal Executive Directors 2009 620,595 194,401 - 227,576 1,042,572

2008 411,824 - - - 411,824

Former BMA Gold Executive Directors

M K Wheatley Managing Director and CEO

2009 200,000* 50,000 - 144,649 394,649

2008 - - - - -

K J Winters Executive Director Finance/Company Secretary

2009 50,000* - - 63,576 113,576

2008 - - - - -

Subtotal Former BMA Gold Executive Directors

2009 250,000 50,000 - 208,225 508,225

2008

Non-executive Directors

M K Wheatley Non-executive Chairman

2009 76,223 - 2,984 59,917 139,124

2008 - - - - -

B E DavisonNon-executive Director

2009 11,824 - - 43,778 55,602

2008 - - - - -

K V DicksNon-executive Director

2009 17,639 - - 65,656 83,295

2008 18,930 - - - 18,930

W B HarrisNon-executive Director

2009 11,824 - - 43,778 55,602

2008 - - - - -

S SwanaNon-executive Director

2009 17,273 - - 65,656 82,929

2008 15,173 - - - 15,173

K J WintersNon-executive Director

2009 23,889 - - 43,718 67,607

2008 - - - - -

W M O’KeeffeResigned 14 April 2009

2009 - - - 12,457 12,457

2008 - - - - -

Subtotal non-executive Directors 2009 158,672 - 2,984 334,960 496,616

2008 34,103 - - - 34,103

20



payments


A$ A$ A$ A$ A$

Other key management personnel

I J MaraisSenior Vice President: RSA Operations

2009 272,456 81,692 - 111,377 465,525

2008 206,202 - - - 206,202

S CaddySenior Vice President: Projects

2009 113,524 - - 188,260 301,784

2008 - - - - -

P B KrugerCompany Secretary

2009 166,502 37,400 - 121,496 325,398

2008 153,696 - - - 153,696

Subtotal other key managementpersonnel 2009 552,482 119,092 - 421,133 1,092,707

2008 359,898 - - - 359,898

Total directors’ and executives remuneration 2009 1,581,749 363,493 2,984 1,191,894 3,140,120

2008 805,825 - - - 805,825

* Termination payments of A$200,000 and A$50,000 respectively made to M K Wheatley and K J Winters as executives of the former BMA Gold. There were no other termination benefits made to executives or KMP during the financial year ended 31 December 2009 or in the previous financial year.

The relative proportions of remuneration that are linked to performance and those that are fixed for the Group are as follows:

At Risk

Fixed Remuneration Short term incentive Long term incentive

2009 2008 2009 2008 2009 2008

Executive directors

N J Froneman 54% 100% 22% - 24% -

C D Chadwick 70% 100% 12% - 18% -

Former BMA Gold Executive directors

M K Wheatley 51% - 13% - 36% -

K J Winters 44% - - - 56% -

Non-executive directors

M K Wheatley 55% - - - 45% -

B E Davison 21% - - - 79% -

K V Dicks 36% 100% - - 64% -

W B Harris 21% - - - 79% -

S Swana 21% 100% - - 79% -

K J Winters 20% - - - 80% -

W M O’Keeffe - - - - 100% -


I J Marais 59% 100% 17% - 24% -

S Caddy 38% - - - 62% -

P B Kruger 51% 100% 12% - 37% -

ANNUAL REPORT 2009

21

Table 2: Parent directors’ and executives remuneration for the year ended 31 December 2009


payments


A$ A$ A$ A$ A$

Executive Directors


2009 211,911 - - 159,563 371,474

2008 - - - - -


2009 150,103 - - 68,013 218,116

2008 - - - - -

Subtotal Executive Directors 2009 362,014 - - 227,576 589,590

2008 - - - - -

Former BMA Executive directors

M K Wheatley Managing Director & CEO

2009 245,872* 50,000 4,128 144,699 444,699

2008 142,267* - 11,066 255,050 408,383

K J WintersExecutive Director Finance / Company Secretary

2009 73,047* - - 63,576 136,623

2008 70,753* - - 37,995 108,748

Subtotal former BMA Executive directors 2009 318,919 50,000 4,128 208,275 581,322

2008 213,020 - 11,066 293,045 517,131



2009 76,223 - 2,984 59,917 139,124

2008 - - - - -


2009 11,824 - - 43,778 55,602

2008 - - - - -


2009 17,639 - - 65,656 83,295

2008 - - - - -


2009 11,824 - - 43,778 55,602

2008 - - - - -


2009 17,273 - - 65,656 82,929

2008 - - - - -


2009 23,859 - - 43,778 67,637

2008 - - - - -

W M O’KeeffeNon-executive chairman - resigned 14 April 2009

2009 - - - 12,457 12,457

2008 - - - 25,330 25,330


2008 - - - 25,330 25,330


I J Marais 2009 158,933 - - 111,377 270,310

Senior Vice President: RSA Operations 2008 - - - - -

S Caddy 2009 113,524 - - 188,260 301,784

Senior Vice President: Projects 2008 - - - - -

P B Kruger 2009 97,126 - - 121,496 218,622

Company Secretary 2008 - - - - -

Subtotal other key management personnel

2009 369,583 - - 421,133 790,716

2008 - - - - -

Total directors’ and executives remuneration

2009 1,129,808 50,000 7,112 1,161,986 2,348,906

2008 213,020 - 11,066 318,375 542,461

* The amounts were paid to the executives of former BMA Gold prior to the reverse acquisition, including the termination payments. Refer to in Table 1 above.

22


The relative proportions of remuneration that are linked to performance and those that are fixed for the Parent are as follows:

At Risk


2009 2008 2009 2008 2009 2008

Executive directors

N J Froneman 54% 100% 22% - 24% -

C D Chadwick 70% 100% 12% - 18% -


M K Wheatley 51% - 13% - 36% -

K J Winters 44% - - - 56% -


M K Wheatley 55% - - - 45% -

B E Davison 21% - - - 79% -

K V Dicks 36% 100% - - 64% -

W B Harris 21% - - - 79% -

S Swana 21% 100% - - 79% -

K J Winters 20% - - - 80% -

W M O’Keeffe - - - - 100% -


I J Marais 59% 100% 17% - 24% -

S Caddy 38% - - - 62% -

P B Kruger 51% 100% 12% - 37% -

Table 3: Group - shareholdings of executives and key management personnel

The tables below detail the movement in shareholdings of executives and key management throughout the year.

Balance1 Jan 2009

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement*

Granted aspart of

remunerationShare

consolidation*Balance

31 Dec 2009

M K Wheatley - - 60,000 - - - 60,000

N J Froneman 170,000 - - - - - 170,000

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana 50,000 - - - - - 50,000

K J Winters - - - - - - -

I J Marais 20,000 - - - - - 20,000

S Caddy - - - - - - -

P B Kruger - - 5,000 - - - 5,000

* 20 for one share consolidation undertaken in May 2009. The re-issue of shares is as a result of the reverse acquisition by Aflease Gold. Shares previously issued by Aflease Gold were re-stated at Gold One.

Balance1 Jan 2008

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement*

Granted aspart of

remunerationShare


31 Dec 2008

M K Wheatley - - - - - - -

N J Froneman 170,000 - - - - - 170,000

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana 50,000 - - - - - 50,000

K J Winters - - - - - - -

ANNUAL REPORT 2009

23

Balance1 Jan 2008

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement*

Granted aspart of

remunerationShare


31 Dec 2008

I J Marais - - 20,000 - - - 20,000

S Caddy - - - - - -

P B Kruger - - - - - - -

Table 4: Parent -shareholdings of executives and key management personnel

The tables below detail the movement in shareholdings of executives and key management throughout the year.

Balance1 Jan 2009

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement

Granted aspart of

remunerationShare


31 Dec 2009

M K Wheatley 6,650,000 - 60,000 - - (6,317,500) 392,500

N J Froneman - - 170,000 - - - 170,000

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana - - 50,000 - - - 50,000

K J Winters 3,165,022 - - - - (3,006,770) 158,252

I J Marais - - 20,000 - - - 20,000

S Caddy - - - - - - -

P B Kruger - - 5,000 - - - 5,000

W M O’Keeffe - - - - - - -

* 20 for one share consolidation undertaken in May 2009.

Balance1 Jan 2008

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement

Granted aspart of

remunerationShare


31 Dec 2008

M K Wheatley 400,000 - 6,250,000** - - - 6,650,000

N J Froneman - - - - - - -

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana - - - - - - -

K J Winters 1,540,022 - 1,625,000** - - - 3,165,022

I J Marais - - - - - - -

S Caddy - - - - - -

P B Kruger - - - - - - -

W M O’Keeffe - - - - - - -


** Purchase of shares as announced in Entitlement Issue Prospectus (10 June 2008) following approval of shareholders at General Meeting dated 4 August 2008.

24


Table 5: Group - option holdings of Key Management Personnel

Details of options over ordinary shares in the company provided as remuneration to each director of Gold One and each key management personnel of the group are set out below. When exercisable, each option converts into one ordinary share of Gold One. Further information on the options is set out in note 29 to the financial statements.

Vested during the year

Balance1 Jan 2009

Granted as partof remuneration

Issued onscheme of

arrangement*Net change

otherBalance

31 Dec 2009 2009 2008

M K Wheatley - 1,500,000 17,620,000 (16,739,000)** 2,381,000 1,400,000 -

N J Froneman 6,877,743 - 6,877,743 (6,877,743)^ 6,877,743 1,508,268 1,508,268

C D Chadwick 3,740,645 - 3,740,645 (3,740,645)^ 3,740,645 749,370 749,370

B E Davison - 450,000 - - 450,000 150,000 -

K V Dicks 640,171 250,000 640,171 (640,171)^ 890,171 83,333 -

W B Harris - 450,000 - - 450,000 150,000 -

S Swana 640,171 250,000 640,171 (640,171)^ 890,171 200,833 213,390

K J Winters - 800,000 7,962,007 (7,563,506)** 1,198,501 500,000 -

I J Marais 4,654,566 - 4,654,566 (4,654,566)^ 4,654,566 1,028,646 1,028,658

S Caddy - 1,067,000 - - 1,067,000 355,667 -

P B Kruger 2,339,977 478,000 2,339,977 (2,339,977)^ 2,817,977 563,043 499,600

* Replacement options in Gold One were issued in lieu of options held by employees of Aflease and which have been granted to these employees over a number of years as part of their employment arrangements.

** Includes effect of 20 for 1 consolidation.

^ Represents share options cancelled and replaced by Gold One share options.

No key executive options were exercised during the period.

31 Dec 08

Balance1 Jan 2008

Granted as partof remuneration Exercised

Net changeother

Balance 31 Dec 2008

Vested & Exercisable

NotExercisable

N J Froneman - 6,877,743 - - 6,877,743 1,508,268 5,369,475

C D Chadwick - 3,740,645 - - 3,740,645 749,370 2,991,275

K V Dicks 390,171 250,000 - - 640,171 - 640,171

S Swana 390,171 250,000 - - 640,171 213,390 426,781

I J Marais 1,067,000 3,587,566 - - 4,654,566 1,028,658 3,625,908

P B Kruger 445,500 1,894,477 - - 2,339,977 499,600 1,840,377

The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are independently determined using a modified binomial model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

Table 6: Parent - option holdings of Key Management Personnel

Details of options over ordinary shares in the company provided as remuneration to each director of Gold One and each key management personnel of the group are set out below. When exercisable, each option converts into one ordinary share of Gold One. Further information on the options is set out in note 29 to the financial statements.


Balance1 Jan 2009


Issued on scheme of


other**Balance

31 Dec 2009 2009 2008

M K Wheatley 17,620,000 1,500,000 - (16,739,000) 2,381,000 1,400,000 212,500

N J Froneman - - 6,877,743 - 6,877,743 1,508,268 -

C D Chadwick - - 3,740,645 - 3,740,645 749,370 -

B E Davison - 450,000 - - 450,000 150,000 -

K V Dicks - 250,000 640,171 - 890,171 83,333 -

W B Harris - 450,000 - - 450,000 150,000 -

ANNUAL REPORT 2009

25


Balance1 Jan 2009


Issued on scheme of


other**Balance

31 Dec 2009 2009 2008

S Swana - 250,000 640,171 - 890,171 200,833 -

K J Winters 7,962,007 800,000 - (7,563,506) 1,198,501 500,000 75,000

I J Marais - - 4,654,566 - 4,654,566 1,028,646 -

S Caddy - 1,067,000 - - 1,067,000 355,667 -

P B Kruger - 478,000 2,339,977 - 2,817,977 563,043 -




31 Dec 08

Balance1 Jan 2008


Net changeother

Balance 31 Dec 2008


NotExercisable

M K Wheatley 2,620,000 15,000,000 - - 17,620,000 5,620,000 12,000,000

K J Winters 462,007 7,500,000 - - 7,962,007 1,962,007 6,000,000

The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are independently determined using a modified binomial model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The model inputs for the South African options granted during the year to 31 December included:

i) Share price at grant date: market price as quoted on the JSE

ii) Expected Forfeiture and Early Exercise: 0%

iii) Expected volatility: between 41.7% and 92.1%

iv) Expected dividends: nil

v) Risk-free interest rate: between 7.0% and 9.3%

The model inputs for the Australian options granted during the year to 31 December included:

vi) Share price at grant date: market price as quoted on the ASX

vii) Expected Forfeiture and Early Exercise: 0%

viii) Expected volatility: 67%

ix) Expected dividends: nil

x) Risk-free interest rate: 6.19%

Details of remuneration: cash bonuses and optionsFor each cash bonus and grant of options included in the above tables, the percentage of the available bonus or grant that was paid, or that vested, in the financial year, and the percentage that was forfeited because the person did not meet the service and performance criteria is set out below. No part of the bonuses is payable in future years. The options vest after three years, provided the vesting conditions are met. No options will vest if the conditions are not satisfied, hence the minimum value of the option yet to vest is nil. The maximum value of the options yet to vest has been determined as the amount of the grant date fair value of the options that is yet to be expensed.

Cash bonus Options

NamePaid

%Forfeited

%

Balance of options

granted at31 Dec 2009 Vested

%Forfeited

%

Financial Years in which

options may vest

Minimum total value of grant yet

to vest (A$)

Maximum total value of grant yet

to vest (A$)

M K Wheatley 100% - 2,375,000 71% - 31/12/2011 Nil 97,212

N J Froneman 79% 21% 6,877,743 30% - 31/12/2011 Nil 746,371

C D Chadwick 82% 18% 3,740,645 40% - 31/12/2011 Nil 398,448

B E Davison - - 450,000 33% - 31/12/2011 Nil 36,275

26


Cash bonus Options

NamePaid

%Forfeited

%

Balance of options

granted at31 Dec 2009 Vested

%Forfeited

%

Financial Years in which

options may vest

Minimum total value of grant yet

to vest (A$)

Maximum total value of grant yet

to vest (A$)

K V Dicks - - 890,171 74% - 31/12/2011 Nil 29,759

W B Harris - - 450,000 33% - 31/12/2011 Nil 36,275

S Swana - - 890,171 74% - 31/12/2011 Nil 29,759

K J Winters - - 1,175,000 49% - 31/12/2011 Nil 78,835

I J Marais 77% 23% 4,654,566 52% - 31/12/2011 Nil 425,770

S Caddy - - 1,067,000 33% - 31/12/2011 Nil 124,499

P B Kruger 80% 20% 2,817,977 46% - 31/12/2011 Nil 290,886

Employment Contracts

Service Agreements

Chairman – Mark Wheatley

In the absence of a senior group executive in Australia, the Chairman, Mr Wheatley, who previously held the position of Chief Executive Officer of BMA Gold Limited, was appointed by Gold One with effect from 25 May 2009, to provide, inter alia, the following services to Gold One in Australia:

• CompletethesaleoftheTwinHillsassetsandensureasmoothtransitiontothepurchasers;

• Assistthechiefexecutiveofficer,thechieffinancialofficerandthecompanysecretarywithasmoothintegrationintoAustralianculture;

• LifttheprofileofGoldOneinAustralia;

• Assistwithcompliancewithstatutoryrequirementsandreporting,aswellasrecruitment.

Mr Wheatley is entitled to a monthly fee of A$ 8,333.00 for these services as well as all out-of pocket expenses. The contract terminates on 30 June 2010. The services are in addition to those relating to the chairmanship of the board.

Chief Executive Officer – Neal Froneman Appointed 25 May 2009

The CEO, Mr Froneman, has been employed since 10 January 2006 by the former Aflease Group .

Mr Froneman was re-appointed as the CEO of Gold One on 25 May 2009 under the following conditions:

• Thetermoftheagreementisopenended

• UndertherevisedcontractMrFronemanisentitledtoafixedremunerationofZAR2,400,000(A$360,240)perannumwhichisreviewedannually by the Remuneration Committee

• Paymentofaterminationbenefitonearlyterminationbythecompany,otherthanforgrossmisconduct,equalto20%ofbasesalaryforthe period of the fiscal year worked, and two years annual salary.

• Theagreementmaybeterminatedbytheexecutiveorthecompanyon3months’notice.

Chief Financial Officer – Christopher Chadwick Appointed 25 May 2009

The CFO, Mr Chadwick, was employed by the former Aflease Group on 01 July 2008. Mr Chadwick was re-appointed as the CFO of Gold One on 25 May 2009 under the following conditions:


• MrChadwickisentitledtoafixedannualremunerationofZAR1,700,000(A$255,170)whichisreviewedannuallybytheRemunerationCommittee

• Paymentofaterminationbenefitonearlyterminationbythecompany,otherthanforgrossmisconductofequalto20%ofbasesalaryfor the period of the fiscal year worked, and one and a half years annual salary


Senior Vice President: RSA Operations – Izak Marais Appointed 25 May 2009

Mr Marais was formerly employed as the Chief Operating Officer by the former Aflease Group on 12 November 2007. Mr Marais was appointed as the Senior Vice President: RSA Operations of Gold One on 25 May 2009 under the following conditions::


ANNUAL REPORT 2009

27

• MrMaraisisentitledtoafixedannualremunerationofZAR1,800,000(A$270,180)whichisreviewedannuallybytheRemunerationCommittee



Senior Vice President: Projects – Syd Caddy Appointed 1 August 2009• Thetermoftheagreementisopenended

• MrCaddyisentitledtoafixedannualremunerationofZAR1,800,000(A$270,180)andisreviewedannuallybytheRemunerationCommittee



Company Secretary – Pierre Kruger Appointed 25 May 2009

The company secretary, Mr Kruger, was employed by the former Aflease Group on 01 January 2007.

Mr Kruger was re-appointed as the company secretary of of Gold One on 25 May 2009 under the following conditions:


• MrKrugerisentitledtoafixedannualremunerationofZAR1,100,000(A$165,110)whichisreviewedannuallybytheRemunerationCommittee

• TheagreementmaybeterminatedbyeitherthecompanyorMrKrugeron1calendarmonthsnotice.

The elements of emoluments have been determined on the basis of the cost to the company. Executive Officers are those directly accountable and responsible for the operational management and strategic direction of the company. Base salaries of directors and executive officers (other than options) are not related to the performance of the company.

15. GROUP - SHARES UNDER OPTIONUnissued ordinary shares of Gold One International Limited under option at the end of the period are as follows:

Grant date Expiry dateExercise

priceBalance start

of yearNo. Granted

during the yearNumber

ExercisedNo. Replaced/

Expired/ forfeitedBalance end of

year

10/04/2005 10/04/2010 R 0.65 2,800,000 - (2,800,000) - -

11/12/2006 11/12/2011 R 2.80 2,264,742 - - (287,671) 1,977,071

14/09/2007 14/09/2012 R 2.44 327,015 - - - 327,015

3/10/2007 3/10/2012 R 2.72 635,829 - - - 635,829

12/11/2007 12/11/2012 R 3.13 1,067,000 - - - 1,067,000

11/12/2007 11/12/2012 R 2.79 1,184,675 - - - 1,184,675

20/12/2007 20/12/2012 R 2.62 711,370 - - (211,370) 500,000

12/06/2008 12/06/2013 R 2.01 9,063,615 - - - 9,063,615

24/06/2008 24/06/2013 R 2.04 7,247,770 - - (59,600) 7,188,170

1/08/2008 1/08/2013 R 2.25 578,200 - - - 578,200

25/09/2008 25/09/2013 R 1.74 459,000 - - - 459,000

23/10/2008 23/10/2013 R 1.45 459,000 - - - 459,000

11/12/2008 11/12/2013 R 1.35 8,960,775 - (67,500) 2,963,799 11,857,074

5/01/2009 5/01/2014 R 1.35 - 441,450 - - 441,450

19/01/2009 19/01/2014 R 1.35 - 82,546 - - 82,546

2/02/2009 2/02/2014 R 1.35 - 293,377 - - 293,377

9/02/2009 9/02/2014 R 1.35 - 203,558 - - 203,558

16/02/2009 16/02/2014 R 1.35 - 174,945 - - 174,945

24/02/2009 24/02/2014 R 1.47 - 59,600 - - 59,600

23/04/2009 23/04/2014 R 1.43 - 478,000 - - 478,000

4/05/2009 4/05/2014 R 1.43 - 478,000 - - 478,000

6/05/2009 6/05/2014 R 1.43 - 295,500 - - 295,500

6/10/2009 6/10/2014 R 1.93 - 2,023,000 - - 2,023,000

28



priceBalance start

of yearNo. Granted




year

12/10/2009 12/10/2014 R 1.93 - 1,310,000 - - 1,310,000

21/12/2009 21/12/2014 R 2.12 - 6,695,924 - - 6,695,924

12/01/2006 31/12/2011 A$ 6.64 30,000 - - (30,000) -

7/06/2006 26/05/2009 A$ 6.90 10,000 - - (10,000) -

7/06/2006 26/05/2009 A$ 5.86 5,000 - - (5,000) -

3/10/2006 3/10/2011 A$ 6.10 125,000 - - (125,000) -

12/03/2008 12/03/2013 A$ 1.00 1,375,000 - - - 1,375,000

26/03/2008 26/03/2013 A$ 0.40 240,000 - - (240,000) -

21/01/2009 21/01/2014 A$ 0.22 - 4,400,000 - - 4,400,000

37,543,991 16,935,900 (2,867,500) 1,995,158 53,607,549

No option holder has any right under the options to participate in any other share issue of the company unless the option holder exercises that option and becomes the holder of Gold One shares prior to the record date for the issue of the shares. Share options held under the Aflease Group share option scheme were cancelled and re-issued under Replacement Option Terms. Share options held under the BMA Gold share option scheme were unaffected. New share options are issued under the Gold One International Limited Share Incentive Scheme approved by shareholders on 26 August 2009.

16. PARENT - SHARES UNDER OPTIONUnissued ordinary shares of Gold One under option at the end of the period are as follows:


priceBalance start

of yearNo. Granted




year

11/12/2006 11/12/2011 R 2.80 - - - 1,246,575 1,246,575

14/09/2007 14/09/2012 R 2.44 - - - 295,500 295,500

3/10/2007 3/10/2012 R 2.72 - - - 157,829 157,829

12/11/2007 12/11/2012 R 3.13 - - - 1,067,000 1,067,000

11/12/2007 11/12/2012 R 2.79 - - - 216,160 216,160

20/12/2007 20/12/2012 R 2.62 - - - 500,000 500,000

12/06/2008 12/06/2013 R 2.01 - - - 3,525,769 3,525,769

24/06/2008 24/06/2013 R 2.04 - - - 7,068,970 7,068,970

11/12/2008 11/12/2013 R 1.35 - - (67,500) 6,389,424 6,321,924

23/04/2009 23/04/2014 R 1.43 - 478,000 - - 478,000

4/05/2009 4/05/2014 R 1.43 - 478,000 - - 478,000

6/05/2009 6/05/2014 R 1.43 - 295,500 - - 295,500

6/10/2009 6/10/2014 R 1.93 - 2,023,000 - - 2,023,000

12/10/2009 12/10/2014 R 1.93 - 478,000 - - 478,000

21/12/2009 21/12/2014 R 2.12 - 2,106,346 - - 2,106,346

12/01/2006 31/12/2011 A$ 6.64 30,000 - - (30,000) -

7/06/2006 26/05/2009 A$ 6.90 10,000 - - (10,000) -

7/06/2006 26/05/2009 A$ 5.86 5,000 - - (5,000) -

3/10/2006 3/10/2011 A$ 6.10 125,000 - - (125,000) -

12/03/2008 12/03/2013 A$ 1.00 1,375,000 - - - 1,375,000

26/03/2008 26/03/2013 A$ 0.40 240,000 - - (240,000) -

21/01/2009 21/01/2014 A$ 0.22 - 4,400,000 - - 4,400,000

1,785,000 10,258,846 (67,500) 20,057,227 32,033,573


ANNUAL REPORT 2009

29

17. CORPORATE INFORMATION The financial report of Gold One for the period ended 31 December 2009 was authorised for issue in accordance with a resolution of the Directors on 31 March 2010.

Gold One is a company limited by shares that is incorporated and domiciled in Australia, whose shares are publicly traded on the ASX and the JSE. Gold One has prepared a consolidated financial report incorporating the entities that it controlled during the financial year.

The nature of the operations and principal activities of the Group are described in the Directors’ Report.

18. EMPLOYEESThe Group employed 933 employees as at 31 December 2009 (2008: 272 employees).

19. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 30.

20. NON-AUDIT SERVICESThe company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company and/or the Group are important.

Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services provided during the year are set out on note 25.

The Board of Directors has considered the position and, in accordance with advice received from the Audit Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• Allnon-auditserviceshavebeenreviewedbytheAuditCommitteetoensuretheydonotimpacttheimpartialityandobjectivityoftheauditor

• NoneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110CodeofEthicsforProfessional Accountants.

During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit firms:

- Transaction advice and due diligence services A$631,931

A$631,931

21. ROUNDING OF AMOUNTSThe company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in this report. Amounts have been rounded off to the nearest thousand dollars, or in certain cases, to the nearest dollar.

22. AUDITORPricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of the Board.

N J FronemanChief Executive Officer Dated:26 March 2010Johannesburg

30


AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF GOLD ONE INTERNATIONAL LIMTED

ANNUAL REPORT 2009

31

CORPORATE GOVERNANCE STATEMENTfor the year ended 31 December 2009

Gold One and the board are committed to achieving and demonstrating the highest standards of corporate governance and as such the board has adopted Corporate Governance Policies and Procedures that provide a foundation for good management and oversight, promotion of ethical and responsible decision making, integrity in financial reporting, timely and balanced disclosure, respect for the rights of shareholders, management of risk and the promotion of performance and remuneration. Features of the Corporate Governance regime of the company and the departures from the August 2007 ASX Principles of Good Corporate Governance and Best Practice Recommendations are discussed below.

Principle 1: Lay solid foundations for management and oversightThe relationship between the board and senior management is critical to the company’s long-term success. The directors are responsible to the shareholders for the performance of the company in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Group as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Group is properly managed.

The responsibilities of the board include:

• Approvingthecompany’sstrategicplans, includingitsbusinessandfinancialstrategies,majorcorporateactionsandinitiativesanditsannualbudget and forecasts;

• monitoringtheoperationalperformanceofthecompany;

• overseeingthemanagementandinternalcontrolofrisksfacingthecompanyaswellasthequalityandintegrityofthecompany’saccountingandfinancial reporting systems;

• developingandimplementingappropriatepoliciesandproceduresforcommunicatingwiththecompany’sshareholdersandotherstakeholders;

• selecting,monitoringandevaluatingtheperformanceoftheCEOandtodevelopsuccessionplansfortheexecutiveandboard;and

• ensuringthatthecompany’sbusiness isconducted inaccordancewiththecompany’shighstandardsofbusinessandethicalconductand inconformity with applicable laws and regulations.

Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the board to the CEO and senior executives as set out in the Group’s delegations policy. These delegations are reviewed on an annual basis.

Principle 2: Structure the board to add valueThe board operates in accordance with the broad principles set out in its charter. The charter details the board’s composition and responsibilities.

Board composition

The charter provides that:

• thecompanyshallhaveaunitaryboardstructurecomprisingabalanceofexecutiveandnon-executivedirectors.Theboardsizeiscurrently set at eight (8) comprising two (2) executive and six (6) non-executive directors;

• thechairmanshouldbeanindependentnon-executivedirector;and

• thechairmanisselectedbytheboardfromamongitsmembers.

Directors’ independence

The board has adopted specific principles in relation to directors’ independence. These state that when determining the independence of non-executive directors, the board should consider whether the director:

• isasubstantialshareholderofthecompanyoranofficerof,orotherwiseassociateddirectlywith,a substantialshareholderofthecompany;

• isorhasbeenemployedinanexecutivecapacitybythecompanyoranyotherGroupmemberwithinthreeyearsbeforecommencingtoserve on the board;

• withinthelastthreeyearshasbeenaprincipalofamaterialprofessionaladviseroramaterialconsultanttothecompanyoranyotherGroup member, or an employee materially associated with the service provided;

• isamaterialsupplierorcustomerofthecompanyoranyotherGroupmember,oranofficeroforotherwiseassociateddirectlyorindirectly with a material supplier or customer;

• hasamaterialcontractualrelationshipwiththecompanyoracontrolledentityotherthanasadirectoroftheGroup;and

• isfreefromanybusinessorotherrelationshipwhichcould,orcouldreasonablybeperceivedto,materiallyinterferewiththedirector’sindependent exercise of their judgement.

The board assesses the independence of non-executive directors on a regular basis. Applying the criteria above, the board is of the considered opinion that three of the non-executive directors, namely Barry Davison, Kenneth Dicks and William Harris should be regarded as being independent. The chairman, Mark Wheatley and Kenneth Winters are currently not regarded as being independent by reason of the fact that they were previously employed by the company in executive capacities. The board however intends re-assessing the status of the chairman and Kenneth Winters at the first board meeting in 2010. Sandile Swana is not regarded as being independent by reason of the fact that he is associated with a shareholder and is also a

32


member of the company’s black empowerment partner. The Corporate Governance and Nominating Committee have been tasked with ensuring that the majority of the board comprises independent non-executive directors by the end of 2010.

Board members

Details of the members of the board, their experience, expertise, qualifications, term of office, relationships affecting their independence and their independent status are set out above in the Directors’ Report. At the date of signing the Directors’ Report, there are two executive directors and six non-executive directors.

Term of office

The company’s Constitution specifies that all directors save for the CEO must retire from office no later than the third Annual General Meeting (AGM) following their last election. Where eligible, a director may stand for re-election.

Chairman and Chief Executive Officer (CEO)

The chairman is responsible for leading the board, ensuring directors are properly briefed in all matters relevant to their role and responsibilities, facilitating board discussions and managing the board’s relationship with the company’s senior executives. In accepting the position, the chairman has acknowledged that it will require a significant time commitment and has confirmed that other positions will not hinder his effective performance in this role.

The CEO is responsible for implementing Group strategies and policies. The board charter specifies that these are separate roles to be undertaken by separate people.

Director Orientation

The chairman and the company secretary are responsible for providing an orientation for new directors and for periodically providing materials for directors on subjects relevant to their duties as board members. All directors are expected to participate in any additional continuing education programs offered by the company to enable directors to maintain the level of knowledge and expertise necessary to perform their duties as directors of a public company.

Commitment

In anticipation of the scheme of arrangement being implemented on 25 May 2009, the nominated directors at the time held an informal board meeting in March 2009 followed by three (3) formal board meetings post 25 May 2009. The board and committee meetings were held over two (2) days and included a full tour of the underground workings and surface infrastructure at Modder East.

The board is required to meet at least four (4) times per year and the directors are expected to attend board meetings and to spend the time to discharge their duties diligently and responsibly. The non-executive directors are entitled to hold scheduled sessions without the executive directors being present.

The number of meetings of the company’s board of directors and of each board committee held during the period ended 31 December 2009, and the number of meetings attended by each director is disclosed on page 13.

Directors may serve on the boards of other companies save that executive directors must obtain board approval for appointments outside the Gold One group of companies. However, in the light of the negative impact of competing time commitments and possible conflicts of interest when directors serve on multiple boards, directors are encouraged to limit the number of boards on which they serve. In respect of the executive directors, no appointments of this nature were accepted during the period ended 31 December 2009.

Independent professional advice

Directors and board committees have the right at any time, in connection with their duties and responsibilities, to seek independent professional advice at the company’s expense.

Conflict of interests

Directors are required to disclose to the board any financial interest or personal interest in any contract or transaction that is being considered by the board. Disclosed conflicts of interest are required to be minuted.

Performance assessment

The Board Charter provides that the board, through the Corporate Governance and Nominating Committee, should at least annually review its own performance and the performance of its committees and individual board members. Assessments were not carried out in accordance with this process during the period under review given the short period that the board has been formed. The board did however resolve that the chairman should assess the performance of the directors and raise any shortcomings with the director concerned. The annual assessment will be revisited at the end of 2010.

Board committees

The board has established a number of committees to assist in the execution of its duties and to allow detailed consideration of complex issues. Current committees of the board are the Corporate Governance and Nominating Committee, the Remuneration Committee, the Audit Committee and the Safety, Health, Environment and Sustainable Development Committee. Save for the Safety, Health, Environment and Sustainable Development Committee on which an executive director is required to serve, all other committees are comprised entirely of non-executive directors. Executive

ANNUAL REPORT 2009

33

directors may attend meetings at the invitation of the chairman of the relevant committee. The committee structure and membership is reviewed on an annual basis. A policy of rotation of committee members applies.

Each committee has its own written charter setting out its role and responsibilities, composition, structure, membership requirements and the manner in which the committee is to operate. All of these charters are reviewed on an annual basis. All matters determined by committees are submitted to the full board as recommendations for board decisions.

Minutes of committee meetings are tabled at the subsequent board meeting. Additional requirements for specific reporting by the committees to the board are addressed in the charter of the individual committees.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee consists of the following non-executive directors (two of whom are independent):

Mark Wheatley (Chairman)

Barry Davison

Kenneth Dicks

Details of these directors’ attendance at committee meetings are set out in the Directors’ Report on page 13.

The primary responsibilities of the committee are to:

• determinethecriteria,objectivesandproceduresforselectingmembersoftheboard;

• toactivelyseekandidentifyindividualsqualifiedtobecomemembersoftheboard;

• toreviewallnominationsforre-electiontotheboard;

• conductanannualreviewofthemembershipoftheboardhavingregardtopresentandfutureneedsofthecompanyandtomakerecom-mendations on board composition and appointments;

• conductanannualreviewofandconcludeontheindependenceofeachdirector;

• proposecandidatesforboardvacancies;

• overseetheannualperformanceassessmentprogram;

• overseeboardsuccessionincludingthesuccessionoftheChairman;

• developandreviewtheboardandcommitteecharters.

Safety, Health, Environment and Sustainable Development Committee

The Safety, Health, Environment and Sustainable Development Committee consists of the following directors:

Kenneth Dicks (Chairman)

Sandile Swana

Mark Wheatley

Neal Froneman (Executive Director)

The main responsibilities of the committee are to:

• reviewwithmanagementthecompany’spolicies,programsandpracticeswithrespecttotheenvironment,occupationalhealthandsafety and sustainable development, including in particular initiatives to promote the development and empowerment of historically disadvantaged persons;

• reviewwithmanagementthecompany’spoliciesandprogramswithrespecttotheidentificationandmanagementofriskspertainingtothe environment, occupational health and safety and sustainable development matters and steps taken by management to monitor and control such exposures;

• monitortheeffectivenessofmanagementsystemsinplacetoensurecompliancewithapplicablelaws,rulesandregulations;

• apprisetheAuditCommitteeofsignificantchangesinfinancialriskexposuresorpotentialdisclosureissuesrelatingtoenvironmentalandrehabilitation issues.

Principle 3: Promote ethical and responsible decision making

Code of Conduct

The company is in the process of developing a statement of values and a Code of Conduct (the Code). The Code will be regularly reviewed and updated as necessary to ensure it reflects the highest standards of behavior and professionalism and the practices necessary to maintain confidence in the Group’s integrity and to take into account legal obligations and reasonable expectations of the company’s stakeholders.

In summary, the Code will require that at all times all company personnel act with the utmost integrity, objectivity and in compliance with the letter and the spirit of the law and company policies.

The company has established a securities trading policy for directors in terms of which the purchase and sale of securities in any companies in the Group by directors is not permitted during closed or prohibited periods. Any transactions undertaken by directors must be notified to the chairman in

34


advance and his prior written consent to trade obtained. The company has also established a trading policy for executives (other than directors) and senior management who are obliged to obtain prior written approval from the company secretary before trading in securities of the Group.

The directors are satisfied that the Group has complied with its policies on ethical standards, including trading in securities.

Principle 4: Safeguard integrity in financial reporting

Audit Committee

The Audit Committee consists of the following non-executive directors:

Kenneth Winters (Chairman)

William Harris

Sandile Swana

Only William Harris is regarded as being independent and the board intends to rectify this position in the 2010 financial year by re-assessing the independence of the committee members and/or appointing independent members to the committee following the Annual General Meeting (AGM).

Details of these directors’ qualifications and attendance at Audit Committee meetings are set out in the Directors’ Report on page 13.

All members of the Audit Committee are financially literate and have an appropriate understanding of the gold mining industry. The Audit Committee operates in accordance with a charter approved by the board.

In carrying out its oversight responsibilities, the committee must undertake oversight of the following:

• theauditors;

• financialstatementsandreportingprocess;

• regulatorycompliance;

• riskmanagement;

• internalcontrolandaudit.

In fulfilling its responsibilities, the Audit Committee:

• receivesregularreportsfrommanagementandtheexternalauditors;

• meetswiththeexternalauditorsatleasttwiceayear,ormorefrequentlyifnecessary;

• reviewstheprocessestheCEOandCFOhaveinplacetosupporttheircertificationstotheboard;

• reviewsanysignificantdisagreementsbetweentheauditorsandmanagement,irrespectiveofwhethertheyhavebeenresolved;

• meetsseparatelywiththeexternalauditorsatleasttwiceayearwithoutthepresenceofmanagement;and

• providestheexternalauditorswithaclearlineofdirectcommunicationatanytimetoeitherthechairmanoftheAuditCommitteeorthechairman of the board.

The Audit Committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.

External auditors

The company and audit committee policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. PricewaterhouseCoopers was appointed as the external auditor in 2009. It is PricewaterhouseCoopers’ policy to rotate audit engagement partners on listed companies at least every five years.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the Directors’ Report. It is the policy of the external auditors to provide an annual declaration of their independence to the Audit Committee.

The external auditor will attend the AGM and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Principles 5 and 6: Make timely and balanced disclosures and respect the rights of shareholders

Continuous disclosure and shareholder communication

The company is developing written policies and procedures on information disclosure that will focus on continuous disclosure of any information concerning the Group that a reasonable person would expect to have a material effect on the price of the company’s securities. These policies and procedures will also include the arrangements the company has in place to promote communication with shareholders and encourage effective participation at general meetings.

The company secretary has been nominated as the person responsible for communications with both the ASX and the JSE. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and in conjunction with the Vice president: Investor Relations overseeing and coordinating information disclosure to the ASX, JSE, analysts, brokers, shareholders, the media and the public.

All information disclosed to the ASX and JSE is posted on the company’s website as soon as it has been disclosed. Similarly when analysts are briefed on aspects of the Group’s operations, the material used in the presentation is released to the exchanges and posted on the company’s website.

ANNUAL REPORT 2009

35

All shareholders may elect to receive a copy of the company’s annual (full or concise) and half-yearly reports. In addition, the company seeks to provide opportunities for shareholders to participate through electronic means. Recent initiatives to facilitate this include making all company announcements, media briefings, details of company meetings, press releases for prior years and historical financial reports available on the company’s website. The website also enables users to register their email address for direct email updates on company matters.

Principle 7: Recognise and manage riskThe board, through the Audit Committee, is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. Having regard to the fact that the current board was only appointed in May 2009, the board has tasked the Audit Committee with ensuring that a risk management policy is adopted. The board will re-assess the need for a separate risk committee in 2010. During the year under review, management has designed and implemented a system of risk management and internal control systems which have been reviewed by the Audit Committee. The board has also resolved that risk management be placed on the board agenda as a permanent item.

In summary, the company policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Group’s business objectives.

Considerable importance is placed on maintaining a strong control environment. There is an organisation structure with clearly drawn lines of accountability and delegation of authority.

Corporate reporting

The CEO and CFO have made the following certifications to the board:

• thatthecompany’sfinancialreportsarecompleteandpresentatrueandfairview,inallmaterialrespects,ofthefinancialconditionandoperational results of the company and Group and are in accordance with relevant accounting standards;

• thattheabovestatementisfoundedonasoundsystemofriskmanagementandinternalcomplianceandcontrolwhichimplementsthepolicies adopted by the board and that the company’s risk management and internal compliance and control is operating efficiently and effectively in all material respects in relation to financial reporting risks.

Principle 8: Remunerate fairly and responsibly

Remuneration Committee

The Remuneration Committee consists of the following non-executive directors (the majority of whom are independent):

Barry Davison (Chairman)

William Harris

Kenneth Winters

Details of these directors’ attendance at remuneration committee meetings are set out in the Directors’ Report on page 13.

The Remuneration Committee operates in accordance with its charter which has been approved by the board. The role of the Committee is to oversee the administration of the company’s compensation plans including its share option plans and to discharge the board’s responsibilities with respect to the remuneration of the CEO.

In establishing and administering the company’s executive remuneration, the committee must seek to align executive remuneration with company performance and shareholder interests and must set remuneration standards which attract, retain and motivate a competent executive team having regard to remuneration paid to executives of comparable companies and any other factors it deems appropriate that are consistent with the policies set out in both Remuneration and Board Charters’.

The committee’s primary responsibilities are:

• toreviewandmakerecommendationstotheboardwithrespecttoincentivecompensationandequitybasedplans;

• tooverseetheimplementationandadministrationoftheremunerationplansofthecompany;

• toapproveallexecutiveemploymentagreements;

• onanannualbasis,toreviewandapprovegoalsandobjectivesfortheexecutives;

• onanannualbasis,tomakerecommendationstotheboardontheformandamountofcompensationandotherbenefitstobepaidfordirectors’ services.

The committee has authority to retain, in its discretion, without management approval and at the company’s expense, persons having special competencies to assist the committee in fulfilling its duties and responsibilities.

Each member of the senior executive team signs a formal employment contract at the time of their appointment covering a range of matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a specific formal job description. This job description is reviewed by the remuneration committee on an annual basis and, where necessary, is revised in consultation with the relevant employee.

No scheme for retirement benefits for non-executive directors is in place.

Further information on directors’ and executives’ remuneration, including principles used to determine remuneration, is set out in the Directors’ Report under the heading ‘Remuneration report’.

36


Company secretaries

The company has appointed a company secretary in each jurisdiction in which it operates. They provide advice to the board in respect of corporate governance and the recommendations contained in the ASX Governance Principles. In addition to their statutory duties, the company secretaries provide the board, committees and directors individually with guidance as to the discharging of their responsibilities in the best interest of the company. The company secretaries are also required to assist with the orientation of new directors and executives so as to familiarise them with the affairs and business of the group and the strategies of the board.

The appointment and removal of a company secretary is a matter for the board as a whole.

ANNUAL REPORT 2009

37

GOLD ONE INTERNATIONAL LIMITED AND ITS CONTROLLED ENTITIES

FINANCIAL REPORT for the year ended 31 December 2009

CONTENTSStatement of Comprehensive Income 38

Statement of Financial Position 39

Statement of Cashflows 40

Statement of Changes in Equity 41

Notes to the Financial Statements 42-78

Directors’ Declaration 79

Independent Audit Report 80-81

Other ASX Information 82-84

This financial report covers both the separate financial statements of Gold One International Limited as an individual entity and the consolidated financial statements for the consolidated entity consisting of Gold One International Limited and its subsidiaries. The financial report is presented in the Australian currency.

Gold One International Limited is a company limited by shares, incorporated and domiciled in Australia.

Its registered office and principal place of business is:

Gold One International LimitedA.B.N 35 094 265 746Level 3100 Mount StreetNorth Sydney NSW 2060

A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of operations and activities on pages 6 to 11 and in the directors’ report on pages 12 to 29, both of which are not part of this financial report.

The financial report was authorised for issue by the directors on 31 March 2010. The directors have the power to amend and reissue the financial report. All press releases, financial reports and other information are available at our Shareholders’ Centre on our website.

38


STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 31 December 2009

Group Group Parent Parent

2009 2008 2009 2008

Note A$’000 A$’000 A$’000 A$’000

Revenue 35 8,863 9,260 4,593 95

Cost of Sales (3,978) - - -

Gross profit 4,885 9,260 4,593 95

Other income 22 - - -

General and administrative expenditure 5 (15,502) (3,344) (13,306) (1,005)

Other expenses 6 (9,057) 98 (9,486) (1,336)

Exploration and pre-feasibility expenditure (3,885) (4,321) (81) -

Operating Loss before finance costs (23,537) 1,693 (18,280) (2,246)

Finance costs (7,264) (7,711) (4,067) (2)

Loss before income tax (30,801) (6,018) (22,347) (2,248)

Income tax expense 7 4,731 (465) - -

Loss for the year (26,070) (6,483) (22,347) (2,248)

Other comprehensive (loss)/income:

Currency translation differences on foreign operations (6,993) (3,225) - -

Tax - - - -

Other comprehensive (loss)/income for the year, net of tax (6,993) (3,225) - -

Total comprehensive (loss)/income for the year (33,063) (9,708) (22,347) (2,248)

Loss for the year attributable to:

Non controlling interest - - - -

Owners of the Parent (26,070) (6,483) (22,347) (2,248)

Total comprehensive (loss)/income for the year attributable to:

Non controlling interest - - - -

Owners of Gold One International Limited (33,063) (9,708) (22,347) (2,248)

Loss attributable to ordinary equity holders of the company:

Loss per share (cents)

- Basic and diluted 9 (0.04) (0.01)

Average number of shares 645,254,632 527,381,180

The statement of comprehensive income should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2009

39


STATEMENT OF FINANCIAL POSITIONas at 31 December 2009

Group Group Parent Parent

31 Dec 31 Dec 31 Dec 31 Dec

2009 2008 2009 2008

Notes A$’000 A$’000 A$’000 A$’000

ASSETS

Current assets

Cash and cash equivalents 10 15,268 39,254 5,920 948

Trade and other receivables 11 6,973 1,327 80,343 37

Inventories 12 2,244 45 - -

Available for sale assets 13 - 5,922 - -

24,485 46,548 86,263 985

Non-current assets

Receivables 14 18 - 10,730 18

Held-to-maturity investments 15 1,293 1,147 - -

Investment in subsidiaries 16 - - 295,633 -

Property, plant and equipment 17 142,323 99,538 112 44

143,634 100,685 306,475 62

Total assets 168,119 147,233 392,738 1,047

LIABILITIES

Current liabilities

Trade and other payables 19 10,340 7,010 1,583 440

Provisions 20 1,597 736 111 14

Financial liabilities designated at fair value 21 80,293 - 80,293 -

92,230 7,746 81,987 454

Non-current liabilities

Financial liabilities designated at fair value 21 - 93,846 - -

Deferred tax liability - 4,847 - -

Provisions 22 3,021 2,352 - -

3,021 101,045 - -

Total liabilities 95,251 108,791 81,987 454

NET ASSETS 72,868 38,442 310,751 593

EQUITY

Contributed Equity 23 130,215 66,179 388,925 62,908

Reserves 24 (3,728) (188) 10,555 4,067

Accumulated deficit 24 (53,619) (27,549) (88,729) (66,382)

Capital and reserves attributable to owners of Gold One International Limited 72,868 38,442 310,751 593

Non-controlling interest - - - -

TOTAL EQUITY 72,868 38,442 310,751 593

The statement of financial position should be read in conjunction with the accompanying notes.

40


STATEMENT OF CASHFLOWSfor the year ended 31 December 2009

Group 31 Dec 2009

Group 31 Dec 2008

Parent 31 Dec 2009

Parent 31 Dec 2008

Notes A$’000 A$’000 A$’000 A$’000

Cash flows from operating activities

Receipts from customers 7,041 - - -

Payments to suppliers and employees (32,588) (3,891) (2,530) (957)

28 (25,547) (3,891) (2,530) (957)

Interest received 1,822 9,260 148 95

Interest paid (7,264) (7,711) (4,067) (2)

Income taxes paid (147) (828) - -

Net cash outflow from operating activities (31,136) (3,170) (6,449) (864)

Cash flows from investing activities

Payments for property, plant and equipment (34,069) (61,868) (156) (31)

Proceeds from sale of property, plant and equipment 504 - 504 -

(Increase)/Decrease in investments - (219) (10,164) -

(Payment)/Refund of performance bonds - - - (18)

Increase in deposits (300) - - -

Net cash outflow from investing activities (33,865) (62,087) (9,816) (49)

Cash flows from financing activities

Proceeds from issue of shares 55,447 37 34,861 637

Loan advanced to controlled entity - - - (510)

Repayment of borrowings (13,481) - (13,481) -

Net cash inflow from financing activities 41,966 37 21,380 127

Net increase/(decrease) in cash and cash equivalents (23,035) (65,220) 5,115 (786)

Cash and cash equivalents at beginning of period 10 39,254 105,879 948 1,734

Effects of exchange rate changes on cash and cash equivalents (951) (1,405) (143) -

Cash and cash equivalents at end of period 10 15,268 39,254 5,920 948

The statement of cash flows should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2009

41


STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2009

Consolidated NotesContributed

Equity ReservesAccumulated

Deficit Total Equity

A$’000 A$’000 A$’000 A$’000

Balance at 1 January 2008 59,922 1,093 (21,066) 39,949

Total comprehensive loss for the year 24 - (3,225) (6,483) (9,708)

Transactions with owners in their capacity as owners

Contributions of equity net of transaction costs 23 6,257 - - 6,257

Employee share options 24 - 1,944 - 1,944

Balance at 31 December 2008 66,179 (188) (27,549) 38,442

Total comprehensive loss for the year 24 - (5,702) (26,070) (31,772)


Contributions of equity net of transaction costs 23 56,667 - - 56,667

Shares issued on acquisition 23 7,355 - - 7,355

Employee share options 24 14 2,162 - 2,176

Balance as at 31 December 2009 130,215 (3,728) (53,619) 72,868

ParentContributed

Equity ReservesAccumulated

Deficit Total Equity

A$’000 A$’000 A$’000 A$’000

Balance at 1 January 2008 62,271 3,512 (64,134) 1,649

Total comprehensive loss for the year 24 - - (2,248) (2,248)


Contributions of equity net of transaction costs 23 636 - - 636

Employee share options 24 1 555 - 556

Balance at 31 Dec 2008 62,908 4,067 (66,382) 593

Total comprehensive loss for the year 24 - - (22,347) (22,347)


Contributions of equity net of transaction costs 23 - - - -

Shares issued on acquisition 326,003 - - 326,003

Employee share options 24 14 6,488 - 6,502

Balance as at 31 Dec 2009 388,925 10,555 (88,729) 310,751

The statement of changes in equity should be read in conjunction with the accompanying notes.

42

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2009

CONTENTS

Summary of Significant Accounting Policies 43-52

Financial Risk Management 52-55

Critical Accounting Estimates and Judgments 55-56

Segment Information 56

General and Administration Expenditure 56

Other Expenses 57

Income Tax 57-58

Dividends Paid and Proposed 58

Basic loss per share 59

Cash and Cash Equivalents 59

Trade and other receivables (current) 59

Inventories 59

Available-for-sale assets 60

Receivables (Non-current) 60

Held-to Maturity Investment 60

Investment in Subsidiaries 60

Property, plant and equipment 61

Intangibles 62

Trade and other payables 62

Provisions 62

Financial Liabilities 63

Provisions (Non-current) 64

Contributed Equity 64-65

Retained earnings and reserves 65-66

Auditor remuneration 66-67

Commitments and Contingencies 67-68

Reconciliation of loss before income tax to net cash outflow from operating activities 68

Share Based Payment Plans 68-70

Key management personnel disclosures 70-76

Related Party Disclosures 76-77

Events after the balance sheet date 77

Business Combinations 77-78

Subsidiaries 78

Revenue 78

ANNUAL REPORT 2009

43

1. Summary of Significant Accounting Policies The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes separate financial statements for Gold One International Limited (Gold One) (formerly BMA Gold Limited) as an individual entity and the consolidated entity consists of Gold One and its subsidiaries. On 18 May 2009 Gold One, a company incorporated in Australia and listed on the ASX, inward listed on the JSE and on 25 May 2009 acquired all the issued ordinary shares in Gold One Africa Limited (Gold One Africa) (formerly Aflease Gold Limited) (Refer Note 33). This transaction is accounted for as a reverse acquisition in accordance with the policy set out in Note 1(c).

(a) Basis of PreparationThis general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRSThe financial report of Gold One also complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Historical Cost ConventionThese financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property.

Presentation of Financial StatementsThe September 2007 revised AASB 101 requires the separate presentation of a statement of comprehensive income and a statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. All non-owner changes in equity must now be presented in the statement of comprehensive income. As a consequence, the group had to change the presentation of its financial statements. If an entity has made a prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative period. The group has applied the revised standard from 1 January 2009. Comparative information has been re-presented so that it is also in conformity with the revised standard.

Critical accounting estimatesThe preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

(b) Principles of Consolidation

SubsidiariesThe consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Gold One (‘’company’’ or ‘’parent entity’’) as at 31 December 2009 and the results of all subsidiaries for the year then ended. Gold One and its subsidiaries together are referred to in this financial report as the group or the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the group (refer to note 33).

The group applies a policy of treating transactions with non controlling interests as equity. This will no longer result in goodwill or gains and losses. Refer to the change in accounting policy as a result of the adoption of AASB 127 below.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income and statement of financial position respectively.

Investments in subsidiaries are accounted for at cost in the individual financial statements of Gold One.

Change in accounting policyThe amendments to AASB 5 Discontinued Operations and AASB 1 First-Time Adoption of Australian-Equivalents to International Financial Reporting Standards are part of the IASB’s annual improvements project published in May 2008. They clarify that all of a subsidiary’s assets

44


and liabilities are classified as held for sale if a partial disposal sale plan results in loss of control. Relevant disclosures should be made for this subsidiary if the definition of a discontinued operation is met. The group will apply the amendments prospectively to all partial disposals of subsidiaries from 1 July 2009.

In July 2008, the AASB approved amendments to AASB 1 First-time Adoption of International Financial Reporting Standards and AABS 127 Consolidated and Separate Financial Statements. The group will apply the revised rules prospectively from 1 July 2009. After that date, all dividends received from investments in subsidiaries, jointly controlled entities or associates will be recognised as revenue, even if they are paid out of pre-acquisition profits, but the investments may need to be tested for impairment as a result of the dividend payment. Under the entity’s current policy, these dividends are deducted from the cost of the investment. Furthermore, when a new intermediate parent entity is created in internal reorganisations it will measure its investment in subsidiaries at the carrying amounts of the net assets of the subsidiary rather than the subsidiary’s fair value.

The revised AASB 127 requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control. These transactions will no longer result in goodwill or gains and losses. It has been early adopted from annual reporting period beginning 01 January 2009. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. The group applies the revised standards to all business combinations and transactions with non-controlling interests.

(c) Business combinationA business combination is a transaction or other event in which an acquirer obtains control of one or more subsidiaries. An acquirer shall be identified for all business combinations. The acquirer is the combining entity that obtains control of the other combining entities or businesses.

A reverse acquisition occurs when the acquirer is the entity whose equity interests have been acquired and the issuing entity is the acquiree. This might be the case when a private entity arranges to have itself ‘acquired’ by a smaller public entity as a means of obtaining a stock exchange listing. Although legally the issuing entity is regarded as the parent and the private entity is regarded as the subsidiary, the legal subsidiary is the acquirer if it has the power to govern the financial and operating policies of the legal parent so as to obtain benefits from its activities.

In a reverse acquisition, the cost of the business combination is deemed to have been incurred by the legal subsidiary in the form of equity instruments issued to the owners of the legal parent. The published price of the equity instruments of the acquirer is used to determine the cost of the combination, and a calculation shall be made to determine the number of equity instruments the acquirer would have to issue to provide the same percentage ownership interest of the combined entity to the owners/shareholder of the acquirer as they have in the combined entity as a result of the reverse acquisition. The fair value of the number of equity instruments so calculated shall be used as the cost of combination.

On 25 May 2009, Gold One acquired 100% of the issued shares of Gold One Africa (formerly Aflease Gold Limited). Under the principles of AASB 3 Business combinations, Gold One Africa is the accounting acquirer in the business combination. Therefore, the transaction has been accounted for as a reverse acquisition. Accordingly, the consolidated financial statements of Gold One have been prepared as a continuation of the consolidated financial statements of Gold One Africa. Gold One Africa, as the acquirer, has accounted for the acquisition of Gold One from 25 May 2009.

The impact of the reverse acquisition on each of the primary statements from the date of acquisition is as follows:

i) Statement of comprehensive income• The2009consolidatedstatementofcomprehensiveincomecomprises12monthsofGoldOneAfricaand7monthsofGoldOne.

• The2008consolidatedstatementofcomprehensiveincomecomprises12monthsofGoldOneAfrica.

ii) Statement of financial position• The2009consolidatedstatementoffinancialpositionrepresentsbothGoldOneAfricaandGoldOneasat31December2009.

• The2008consolidatedstatementoffinancialpositionrepresentsGoldOneAfricaasat31December2008.

iii) Statement of cashflows• The2009consolidatedstatementofcashflowscomprisesthecashbalanceofGoldOneAfricaat1January2009,thecashtransactions

for the year (12 months for Gold One Africa and 7 months for Gold One) and the cash balance of Gold One Africa and Gold One at 31 December 2009.

• The2008consolidatedstatementofcashflowscomprises12monthsofGoldOneAfrica’scashtransactions

iv) Statement of changes in equity• The2009consolidatedstatementofchangesinequitycomprisesGoldOneAfrica’sequitybalanceat1January2009,itsprofitforthe

year, and transactions with equity holders for 12 months. It also comprises Gold One’s transactions with equity holders in the past 7 months and the equity balance of both companies as at 31 December 2009.

• The2008consolidatedstatementofchangesinequitycomprises12monthsofGoldOneAfrica’schangesinequity

Reverse acquisition accounting applies only to the consolidated financial statements. The parent entity financial statements will continue to represent Gold One as a stand-alone entity for the 2008 and 2009 financial year.

The consideration in a reverse acquisition is deemed to have been incurred by the legal subsidiary, Gold One Africa in the form of equity

ANNUAL REPORT 2009

45

instruments issued to the shareholders of the legal parent, Gold One. The acquisition-date fair value of the consideration transferred has been determined by reference to the fair value of the issued shares of Gold One immediately prior to the business combination.

Change in accounting policyGold One has chosen to early adopt the revised AASB 3 from the annual reporting period beginning 01 January 2009, whereby all acquisition-related costs are expensed in the period in which these costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities shall be set off against equity, namely, against the share premium in terms of the South African Companies Act and equity in terms of the Australian requirements.

Acquisition-related costs are costs the acquirer incurs to effect the business combination. These costs include finder’s fees, advisory, legal, accounting, valuation and other professional or consulting fees, general administrative costs, including the costs of acquisition and costs of registering and issuing debt and equity securities. The acquirer has early adopted the revised AASB 3, whereby all acquisition-related costs shall be expensed in the period in which these costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities shall be set off against equity, namely, against the share premium in terms of the South African Companies Act and equity in terms of the Australian requirements.

Non-controlling interests in an acquiree are now recognised either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This decision is made on an acquisition-by-acquisition basis. Under the previous policy, the non-controlling interest was always recognised at its share of the acquiree’s net identifiable assets. If the group recognises previous acquired deferred tax assests after the initial acquisition accounting is completed there will no longer be any adjustment to goodwill. As a consequence, the recognition of the deferred tax asset will increase the group’s net profit after tax.

(d) Segment ReportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.

The operating segments identified by Gold One, the parent entity, are corporate and administrative activities, South African operations and projects. Projects include exploration and feasability of the groups projects in the Southern African region. The activities in the other regions were immaterial and did not justify separate disclosure.

Change in accounting policyThe group has adopted AASB 8 Operating Segments from 1 January 2009. AASB 8 replaces AASB 114 Segment Reporting. The new standard requires a ‘management approach’, under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in an increase in the number of reportable segments presented. In addition, the segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. There has been no impact on the measurement of the company’s assets and liabilities.

(e) Foreign currency translation

i) Functional and presentation currencyItems included in the financial statements of each entity in the group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (“the functional currency”). The consolidated financial statements are presented in Australian Dollars (AUD), which is the group’s presentation currency. The functional currency of the company and its subsidiaries is the South African Rand (ZAR).

ii) Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are included in the fair value reserve in equity.

iii) Group companiesThe results and financial position of all the 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:

• Assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateatthedateofthebalancesheet

• Income and expenses for each statementof comprehensive income are translated at average exchange rates (unless this is not areasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

46


• Allresultingexchangedifferencesarerecognizedinothercomprehensiveincome.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in profit or loss, as part of the gain or loss on sale where applicable.

(f) Property, plant and equipment

Mine development and plant facilitiesMine and plant development costs are capitalised to the extent that they provide access to ore bodies and have future economic benefit. These costs include the purchase price (including duties and non-refundable taxes) of assets used in the construction of the mine, costs directly related to develop the mine asset for its intended use and the present value of the initial estimate of future costs of rehabilitating the land. Other costs capitalised to the asset are direct costs incurred in the development of the mine and plant and indirect costs that can be directly attributable to the development of the mine and plant. Depreciation of other assets used in the development of the mine and plant, and, borrowing costs directly attributable to the development of the mine and plant are also capitalised. All mine and plant start-up costs and incidental income earned during development are capitalised. The above costs are capitalised until the ore body is available for intended use, at which time the asset is depreciated and further costs are expensed. Mine assets are initially recorded at cost, where after they are measured at cost less accumulated depreciation and accumulated impairment.

i) Undeveloped properties Undeveloped properties are initially valued at the fair value of resources obtained through acquisitions. Capitalised exploration and evaluation expenditure is reviewed for impairment at each balance sheet date. In the case of undeveloped properties, there may be only inferred resources to form a basis for the impairment review.

Subsequent recovery of the resulting carrying value depends on successful development of the area of interest or sale of the project. If a project does not prove viable, all irrecoverable costs associated with the project are written off.

ii) Mineral and surface rightsMineral and surface rights are recorded at cost of acquisition. When there is little likelihood of a mineral right being exploited, or the value of mineral rights have diminished below cost, an impairment loss is recognised against income in the period that such determination is made.

iii) Mining explorationExploration costs are expensed as incurred. When a decision is made that commercial production on a mining property should commence, all further pre-production expenditures are capitalised. These costs include evaluation costs.

iv) Depreciation of mining assetsDepreciation of mine development and plant facilities and mineral and surface rights are computed principally by the units of production method based on estimated reserves. To the extent that these costs benefit the entire ore body, they are depreciated over the estimated life of the ore body. Depreciation is first charged on mining ventures from the date on which the mining ventures are available for intended use.

Non-mining assets

i) Non-mining assets Land is shown at cost and not depreciated. Other non-mining fixed assets are shown at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

ii) Depreciation of non-mining assetsIncluded in non-mining assets are motor vehicles, computer equipment and office equipment. These assets are depreciated on a straight-line basis to allocate their cost to their residual values over their estimated useful lives as follows:

• Motorvehicles 3-10years

• Computerequipment 3years

• Officeequipment 3-10years

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 carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the consolidated statement of comprehensive income during the financial period in which they are incurred.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognised in the consolidated statement of comprehensive income.

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(g) Intangibles

i) GoodwillThe costs of acquisition are allocated to the fair value of assets and liabilities of the acquiree. The excess of the cost of acquisition over fair value is recorded as goodwill. If the fair value of assets and liabilities exceed the cost of acquisition, the cost will be reassessed and then recorded in Profit and Loss in the consolidated statement of comprehensive income. Deferred tax on the difference between the fair value and carrying value of assets and liabilities are considered and accounted for.

(h) Investments and other financial assets

ClassificationThe group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date.

i) Financial assets and financial liabilities at fair value through profit or lossFinancial assets and financial liabilities at fair value through profit or loss are classified as financial assets and financial liabilities held for trading. A financial asset or financial liability is classified in this category if acquired principally for the purpose of selling in the short term. The group has had short-term investments classified in this category. A financial asset or financial liability may be designated at fair value through profit or loss at initial recognition if it contains one or more embedded derivatives. The group has designated the convertible bonds as a financial liability through profit and loss.

ii) Held-to-maturity financial assetsHeld-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the group’s management has the positive intention and ability to hold to maturity. If the group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available for sale. Held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the balance sheet date, which are classified as current assets. The group has long-term investments which are classified in this category.

iii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The group’s loans and receivables comprise trade and other receivables, cash and cash equivalents and trade and other payables in the statement of financial position.

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

v) Recognition of deferred day one profit and lossThe group has issued a convertible bond, which will mature 5 years after issue, where fair value is determined using valuation models for which not all inputs are market observable prices or rates. The convertible bond was initially recognised at the transaction price. The difference between the transaction price and the model value, commonly referred to as ‘day one profit and loss’, is not recognised immediately in profit and loss.

The timing of recognition of deferred day one profit and loss is determined individually. It is either amortised over the life of the transaction, deferred until the instrument’s fair value can be determined using market observable inputs, or realised through settlement. The financial instrument is subsequently measured at fair value, adjusted for the deferred day one profit and loss. Subsequent changes in fair value are recognised immediately in profit or loss. The group has elected to amortise the deferred day one profit and loss over the life of the bond to maturity.

vi) Recognition and de-recognitionRegular purchases and sales of financial assets and financial liabilities are recognised on the trade date - the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets and financial liabilities not carried at fair value through profit or loss. Financial assets and financial liabilities carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the statement of comprehensive income. Available-for-sale financial assets and liabilities; and financial assets and financial liabilities at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method. Financial assets and financial liabilities are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership.

48


vii) Subsequent measurementLoans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the statement of comprehensive income within other income or other expenses in the period in which they arise. Dividend income from financial assets at fair value through profit and loss is recognised in the income statement as part of revenue from continuing operations when the group’s right to receive payments is established.

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in equity. Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in equity.

(i) Inventories

i) Raw materials, stores, work in progress and finished goodsInventories include spares and consumables stated at the lower of cost or net realisable value. Cost of spares and consumables include the purchase price, import duties and other taxes, transport, handling and all other costs directly attributable in to the acquisition of the spares and consumables. Spares and consumables are valued on the weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

(j) Trade receivablesTrade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

A provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy (or similar work out or windup procedure) or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in profit or loss. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited in the consolidated statement of comprehensive income.

(k) Cash and cash equivalentsFor cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(l) Impairment of non-financial assetsGoodwill and intangible assets that have an indefinite useful life are not subject to amortisation and tested annually for impairment. Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(m) Contributed equityOrdinary 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. Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs.

(n) Provisions

i) Asset retirement obligationsThe group recognises the best estimate of the future asset retirement obligation as a liability in the year in which it incurs a legal or constructive obligation associated with the retirement of tangible long-lived assets that results from the acquisition, construction, development, and/or normal use of the assets. The group concurrently recognises a corresponding increase in the carrying amount of the related long-lived asset that is depreciated over the life of the asset. The present value of the asset retirement obligation is reviewed annually using the expected cash flow approach that reflects a range of possible outcomes discounted at credit adjusted risk-free interest rate. The present value is provided for

ANNUAL REPORT 2009

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in full for the estimated future costs of pollution control and rehabilitation, in accordance with environmental and regulatory requirements.

Subsequent to the initial measurement, the asset retirement obligation is adjusted at the end of each year to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. Changes in obligation due to damage caused during the production phase are recognised in profit and loss.

Changes in the obligation due to the passage of time are recognised in profit or loss as a financing cost using the discounted cash flow method. Changes in the obligation due to changes in estimated cash flows are recognised as an adjustment to the carrying amount of the long-lived asset that is depreciated over the remaining life of the asset.

The rehabilitation asset is being amortised over the life of the mine.

(o) Current and deferred income taxThe income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

i) Tax consolidation legislationGold One and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.

The head entity, Gold One, and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in their own right.

In addition to its own current and deferred tax amounts, Gold One also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

(p) Trade payablesTrade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

(q) Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

i) Interest incomeInterest income is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the group.

ii) Sale of goods and Mine productionGoods revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery to the customer, being when the gold leaves the processing plant.

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(r) Employee benefits

i) Wages and salariesLiabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

ii) Long service leaveThe liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

iii) Share based paymentsShare-based compensation benefits are provided to employees via the Gold One International Employee Option Plan, Replacement Option Terms and the Gold One International Share Incentive Scheme. Information relating to these schemes is set out in note 29. The fair value of options granted under the Gold One International Employee Option Plan, Replacement Option Terms and the Gold One International Share Incentive Scheme is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a the Binomial option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the statement of comprehensive income with a corresponding adjustment to equity.

If shares were issued by the Gold One International Limited Share Incentive Scheme to employees for no cash consideration, these shares would vest immediately on grant date and on this date, the market value of the shares issued would be recognised as an employee benefits expense with a corresponding increase in equity.

Change in accounting policyAASB 2008-1 clarifies that vesting conditions are service conditions and performance conditions only and that other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The group has applied the revised standard from 1 January 2009, but it does not affect the accounting for the group’s share-based payments.

iv) Termination benefitsTermination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after reporting date are discounted to present value.

(s) LeasesLeases of property, plant and equipment where the group has substantially transferred all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the instalment is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the lease term.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

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(t) Earnings or loss per share

i) Basic earnings or loss per shareBasic earnings or loss per share is computed by dividing the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year and excluding treasury shares.

ii) Diluted earnings or loss per shareDiluted earnings or loss per share adjusts the figures used in the determination of basic earnings or loss per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(u) DividendsProvision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date.

(v) GST and VATRevenues, expenses and assets are recognised net of the amount of associated GST and VAT, unless the GST and VAT incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST and VAT receivable or payable. The net amount of GST and VAT recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST and VAT components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(w) Going concernThe consolidated entity has incurred a net loss of A$26.070 million for the year ended 31 December 2009 and operating cash outflows of A$31.136 million. The financial position of Gold One at 31 December 2009 reflects a net current liability of A$67.745 million, due to the classification of the company’s convertible bonds liability (A$80.293 million) as a current liability.

The holders of the convertible bonds have the option to put the bonds to the group at the accreted principal amount plus accrued interest on the third anniversary of the closing date, being 12 December 2010. The ability of the group to continue as a going concern is dependent on the mining operations generating sufficient free operating cash and or the obtaining of additional funding to finance the put option.

The mining operations during 2010 are estimated to produce between 100,000 and 120,000 ounces of gold at an average cash cost below U$400/oz.Whilstthedirectorsareconfidenttheminingoperationswillgeneratesufficientfreecashduring2010torepayconvertiblebondsshould the bond holders exercise the put option at 12 December 2010, they are of the considered opinion it is both prudent and preferable the funds required to finance the put option be raised by way of a pure debt facility as opposed to using cash reserves and or equity.

Gold One reported in its December 2009 quarterly review, that it had proactively initiated a process to pursue the implementation of a bank debt facility and that it had engaged advisors in this regard. An independent review of the mine operations and mine plan has been completed as part of the due diligence undertaken in seeking additional debt facilities. The findings of the independent review support the opinion of the directors that the mine plan is achievable. The debt funding process is now at an advanced stage and has resulted in Gold One selecting two banks, one South African and one international, from a short list of four, to provide the debt facility.

The successful close of the facility will be subject to agreeing final terms and conditions with the banks as well as the latter obtaining final internal credit approvals. Gold One is in the process of settling and signing a mandate letter and it is expected that the facility will be in place by mid 2010.

The directors are of the considered opinion that the group will be successful in achieving the mine plan and in securing the debt facility. The directors are further of the opinion that no asset is likely to be realised for an amount less than the amount at which it is recorded in the financial report at 31 December 2009. Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary should the group not continue as a going concern. Therefore, these financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business.

(x) RoundingThe company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ‘’rounding off’’ of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

(y) Adoption of new accounting standards and interpretationsCertain new accounting standards and interpretations have been published that are not mandatory for 31 December 2009 reporting period. The group’s and the parent entity’s assessment of the impact of these new standards and interpretations is set out below:

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i) AASB 2009-8 Amendments to Australian Accounting Standards – Group Cash-Settled Sharebased Payment Transactions [AASB 2] (effective from 1 January 2010)

The amendments made by the AASB to AASB 2 confirm that an entity receiving goods or services in a group share-based payment arrangement must recognise an expense for those goods or services regardless of which entity in the group settles the transaction or whether the transaction is settled in shares or cash. They also clarify how the group share-based payment arrangement should be measured, that is, whether it is measured as an equity- or a cash-settled transaction. The group will apply these amendments retrospectively for the financial reporting period commencing on 1 January 2010. There will be no impact on the group’s or the parent entity’s financial statements.

ii) AASB 2009-10 Amendments to Australian Accounting Standards – Classification of Rights Issues [AASB 132] (effective from 1 February 2010)

In October 2009 the AASB issued an amendment to AASB 132 Financial Instruments: Presentation which addresses the accounting for rights issues that are denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, such rights issues are now classified as equity regardless of the currency in which the exercise price is denominated. Previously, these issues had to be accounted for as derivative liabilities. The amendment must be applied retrospectively in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. The group will apply the amended standard from 1 February 2010. As the group has not made any such rights issues, the amendment will not have any effect on the group’s or the parent entity’s financial statements.

iii) AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 (effective from 1 January 2013)

AASB 9 Financial Instruments addresses the classification and measurement of financial assets and is likely to affect the group’s accounting for its financial assets. The standard is not applicable until 1 January 2013 but is available for early adoption. The group is yet to assess its full impact. However, initial indications are that it may affect the group’s accounting for its available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and losses on available for sale debt investments, for example, will therefore have to be recognised directly in profit or loss. The group has not yet decided when to adopt AASB 9.

iv) Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards (effective from 1 January 2011)

In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accounting periods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities and clarifies and simplifies the definition of a related party. The group will apply the amended standard from 1 January 2011. Neither the group nor the company has investments in associates and therefore there is no impact on the existing related party disclosures.

v) AASB Interpretation 19 Extinguishing financial liabilities with equity instruments and AASB 2009-13 Amendments to Australian Accounting Standards arising from Interpretation 19 (effective from 1 July 2010)

AASB Interpretation 19 clarifies the accounting when an entity renegotiates the terms of its debt with the result that the liability is extinguished by the debtor issuing its own equity instruments to the creditor (debt for equity swap). It requires a gain or loss to be recognised in profit or loss which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. The group will apply the interpretation from 1 January 2011. It is not expected to have any impact on the group or the parent entity’s financial statements since it is only retrospectively applied from the beginning of the earliest period presented (1 January 2010) and the group has not entered into any debt for equity swaps since that date.

vi) AASB 2009-14 Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement (effective from 1 January 2011)

In December 2009, the AASB made an amendment to Interpretation 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The amendment removes an unintended consequence of the interpretation related to voluntary prepayments when there is a minimum funding requirement in regard to the entity’s defined benefit scheme. It permits entities to recognise an asset for a prepayment of contributions made to cover minimum funding requirements. The group does not make any such prepayments and does not have any post-employment defined benefit plans.

2. Financial risk managementThe group’s and parent’s principal financial instruments comprise short-term deposits and the convertible bonds. The main purpose of these financial instruments is to invest surplus funds for the group and parent operations, and provide funding for the development of the Modder East operation. The group and parent have various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

No derivative transactions have been entered into. It is, and has been throughout the period under review, the group and the parent policy that no trading in financial instruments shall be undertaken. The main risks arising from the group and parent financial instruments are cash flow interest rate risk, foreign currency risk, commodity price risk, credit risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis

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on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1 to the financial statements.

The group and the parent entity hold the following financial instruments:

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Mar 2009A$’000

31 Dec 2008A$’000

Financial assets

Restricted cash 4,009 1,108 - -

Short-term deposits 10,607 37,873 5,645 743

Cash 652 273 275 205

Trade and other receivables 6,973 1,327 50 37

Total financial assets 22,241 40,581 5,970 985

Financial liabilities

Financial liabilities (80,293) (93,846) (80,293) -

Trade and other payables (10,340) (7,010) (1,583) (440)

Total financial liabilities (90,633) (100,856) (81,876) (440)

a) Market Risk

Risk Exposure and Responses

i) Interest Rate RiskThe group and parent exposure to market interest rates relates only to the group’s and parent’s short term deposits as its convertible bonds have a fixed coupon rate.

The group and parent constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternatives and the mix of fixed and variable interest rates.

SensitivityIf interest rates had increased by 100 basis points or decreased by 100 basis points from the year end rates, with all other variables held constant, post tax profit for the consolidated group for the year would have been A$106,060 higher/A$106,060 lower, and A$56,450 higher/A$56,450 lower in the parent. The movements in profit are due to higher/lower interest costs from cash balances.

ii) Foreign currency riskThe group and parent entity operate internationally and are exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

The group and parent exposure to foreign currency risk at the reporting date, expressed in Australian dollars, was as follows:

31-Dec-09 31-Dec-08

USD AUD USD AUD

A$’000 A$’000 A$’000 A$,000

Financial liabilities (80,293) - - -

Trade and other payables - (254) - -

Cash and cash equivalents 2,145 5,904 - -

Trade and other receivables - 18 - -

Held to maturity investments - - - -

Sensitivity Based on the financial instruments held at 31 December 2009, had the South African rand weakened/strengthened by 10% against the US dollar (USD) and the Australian dollar (AUD) with all other variables held constant, the group’s post tax profit for the year would have been A$7,248,000 lower/A$7,248,000 higher (2008: A$9,312,800 lower/A$9,312,800 higher), mainly as a result of foreign exchange losses/gains on translation of US dollar financial instruments.

54


b) Commodity price riskThe hedging policy approach taken by management for the year under review has been to not hedge any price risk.

c) Credit riskCredit risk is managed on a group and parent basis. Credit risk arises from cash and cash equivalents, favourable derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

d) Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The group and parent manage liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are generally only invested in instruments that are tradeable in highly liquid markets.

Financing arrangementsThe group and parent did not have access to undrawn borrowing facilities at the end of the reporting period.

Maturity of financial liabilities

Table 1 – Contractual maturity of financial liabilities

Consolidated Parent

Less than 6 monthsA$’000

6-12 monthsA$’000

Over 5 years

A$’000Total

A$’000

Less than 6 monthsA$’000

6-12 monthsA$’000

Over 5 years

A$’000Total

A$’000

Financial liabilities designated at fair value - (74,818) - (74,818) - (74,818) - (74,818)

Trade and other payables (10,340) - - (10,340) (1,583) - - (1,583)

(10,340) (74,818) - (85,158) (1,583) (74,818) - (76,401)

The bond holders have an option to put the bonds to the company in December 2010 at the accreted principal amount plus accrued interest. More details about the financial liabilities are provided in note 21. The amounts disclosed in the above tables are the maximum undiscounted contractual amounts for which the convertible bond could be called by the bond holders.

e) Fair value estimationThe fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The group and parent use a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used to estimate fair value for long-term debt for disclosure purposes.

As of 1 January 2009, the group and parent entity have adopted the amendment to AASB 7 Financial Instruments: Disclosures which requires disclosure of the fair value measurements by level of the following fair value measurement hierarchy:

a) quoted prices (unadjusted) in active markets for identical assets (level 1)

b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and

c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)

The group and parent entity have classified the financial liabilities designated at fair value through profit and loss as level 3 as the inputs for the liabilities are based on significant non-observable market inputs.

ANNUAL REPORT 2009

55

The following tables present the group and the parent entity assets and liabilities measured and recognised at fair value at 31 December 2009:

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Assets

Available-for-sale financial assets - 5,922 - -

Total assets - 5,922 - -

Liabilities

Financial liabilities designated at fair value through profit or loss (80,293) (93,846) (80,293) -

Total liabilities (80,293) (93,846) (80,293) -

Refer to notes 13 and 21 for more details of the Available-for-sale assets and financial liabilities designated at fair value through profit or loss, respectively.

3. Critical Accounting Estimates and JudgmentsEstimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

(a) Critical accounting estimates and assumptionsThe group makes estimates and assumptions concerning the future. The resulting account estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(b) Fair value of financial instrumentsThe fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The group uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at each statement of financial position date.

(c) Share-based payment reserveShare based payments are calculated at fair value at the date granted and recognised as an expense over the vesting period. The group uses certain assumptions as inputs into the valuation model.

(d) Measurement of retirement obligationThe present value of the asset retirement obligation is calculated annually using the expected cash flow approach that reflects a range of possible outcomes discounted at credit adjusted risk-free interest rate.

(e) Fair value of financial liabilitiesThe convertible bond is valued as the sum of two components, a bond-floor component and an embedded option component. The bond floor represents the value of the bond assuming that there were no borrower conversion options or issuer redemption options granted on it. The embedded option component represents the additional value of the conversion option granted to the borrower as well as the redemption option that the issuer holds. The change in value of the convertible bond is in profit or loss as a fair value adjustment on financial liability. The group uses a valuation model which uses certain assumptions as inputs, which are listed below:

Item Value

Spot price (USD/ZAR) 0.31

Strike price (USD/ZAR) 0.38

Risk free rate 1.97%

Volatility 57%

Gains or losses arising from changes in the fair value of the financial assets and financial liabilities at fair value through profit or loss category are recognised in profit or loss in the period in which they arise.

Dividend income from financial assets at fair value through profit or loss is recognised in profit of loss as part of other income when the group’s right to receive payments is established.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset or financial liability is not active (and for unlisted securities for example), the group establishes fair value by using valuation techniques. These include the use of recent arm’s length

56


transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs.

4. Segment Information(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the executive committee that are used to make strategic decisions.

The committee considers the business from both a functional and a geographic perspective and has identified three reportable segments: Gold One, which consists of corporate and administrative activities; South African operations, which consists of the extraction of and processing of gold ore into fine gold, and Projects, which consists of the exploration and feasibility of the group’s properties.

(b) Segment information31 Dec 2009 31 Dec 2008

Corporate*South African

Operations* Projects* Consolidated Corporate*South African

Operations* Projects* Consolidated

A$’000 A$’000 A$’000 A$’000 A$’000 A$’000 A$’000 A$’000

Segment revenue

Sales to external customers - 7,041 - 7,041 - - - -

Other revenue 148 1,663 11 1,822 9,247 13 - 9,260

Total segment revenue 148 8,704 11 8,863 9,247 13 - 9,260

Segment results (21,499) (9,031) (271) (30,801) (2,701) (2,692) (625) (6,018)

Income taxes 4,731 (465)

Loss for the year (26,070) (6,483)

Segment assets and liabilities

Segment assets 7,508 156,923 3,688 168,119 45,321 101,734 178 147,233

Total assets 168,119 147,233

Segment liabilities (81,946) (13,161) (144) (95,251) (93,480) (14,354) (957) (108,791)

Total liabilities (95,251) (108,791)

* Corporate refers to Gold One’s corporate offices in Australia and South Africa, South African operations refer to Gold One Africa and projects refer to the various exploration entities.

The reported measure of assets and liabilities excludes inter-company assets and liabilities. Corporate assets consist mainly of cash and cash equivalents managed centrally for the other operating segments.

5. General and administrative expenditureConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Depreciation and amortisation (1,406) (120) (57) (14)

Audit fees (369) (97) (330) (89)

Marketing expenses (62) - (162) (26)

Listing fees (114) (61) (214) (62)

Insurance (49) (25) (49) (45)

Salaries and employee benefits expenses (2,754) (1,674) (1,694) (304)

Directors’ remuneration (186) (443) (164) (70)

Consultants expenses and management services (10,562) (924) (10,636) (395)

(15,502) (3,344) (13,306) (1,005)

ANNUAL REPORT 2009

57

6. Other expensesConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Share based payments (3,451) (1,893) (1,491) (555)

Impairment of assets (273) - (2) (575)

Impairment of goodwill (5,127) - - -

Gain on sale of assets 245 - 236 -

Loss on investments (862) (7) - -

Fair value adjustment on financial liability 411 1,998 (8,229) -

Other operating expenses - - - (206)

(9,057) 98 (9,486) (1,336)

7. Income TaxThe major components of income tax expense for the period ended 31 December 2009 and 31 December 2008 are:

Consolidated Parent

2009A$’000

2008A$’000

2009A$’000

2008A$’000

(a) Income tax expense

Current income tax

Current income tax charge (24) (442) - -

Tax losses from previous years now brought to account - (23) - -

Deferred income tax

Relating to origination and reversal of temporary differences 4,755 - - -

Tax effect of current year tax losses brought to account - - - -

Income tax expense reporting in statement of comprehensive income 4,731 (465) - -

Income tax expense is attributable to:

Loss from continuing operations 4,731 (465) - -

Loss from discontinued operations - - - -

Aggregate income tax expense 4,731 (465) - -

(b) Numerical reconciliation of income tax to prima facie tax payable

Accounting loss before tax (30,801) (6,018) (22,347) (2,248)

At the ruling income tax rate of 30% 9,240 1,805 6,704 675

Exploration and development impairment 24 - - -

Share based payments 794 530 794 167

Legal fees 182 - 182 -

Transaction costs 1,713 - 1,527 -

Bad debts 47 - - -

Loss on investment 325 - - -

Overseas travel 150 - 150 -

Consulting fees 53 - 53 -

Recoupment interest on convertible bond 119 - 119 -

Tax rate differential (113) 120 (328) -

58


Consolidated Parent

2009A$’000

2008A$’000

2009A$’000

2008A$’000

Other 2,921 (2,920) (5,377) (173)

Other deferred tax assets and liabilities (1,140) - - -

Current year tax losses not brought to account (9,584) - (9,548) (669)

Total (expense)/credit 4,731 (465) - -

(c) Amounts recognised directly in equity

Aggregate current and deferred tax arising in the reporting

period and not recognised in net profit or loss but debited or

credited directly to equity - - - -

Current tax - - - -

Deferred tax - - - -

- - - -

(d) Tax losses

Unused tax losses for which no deferred tax asset has been

recognised: 8,406 - 7,297 2,248

Potential tax benefit at 30% 2,522 - 2,189 675

In addition the company has tax losses in Australia of A$3,751,588 (2008: A$2,333,585) not brought to account as deferred tax benefits because the directors do not believe it is appropriate to regard the utilisation of the tax benefits as probable. This is because the primary revenue earning capacity of the group resides in South Africa, where the taxation benefits are not able to be utilised.

(e) Unrecognised temporary differences

Unrecognised deferred tax assets relating to temporary differences 1,140 2,310 2,697 -

(f) Tax consolidation legislation Gold One and its 100% owned Australian resident subsidiaries have formed a tax consolidated group with effect from 1 July 2003. Gold One is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned subsidiaries on a pro-rata basis. In addition the agreement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. At the balance date, the possibility of default is remote.

Tax effect accounting by members of the tax consolidated groupMembers of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides for the allocation of current taxes to members of the tax consolidated group in accordance with their accounting profit for the period, while deferred taxes are allocated to members of the tax consolidated group in accordance with the principles of AASB 112 ‘Income Taxes’. Allocations under the tax funding agreement are made at the end of each quarter. The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the subsidiaries’ inter-company accounts with the tax consolidated group head company, Gold One. Because under UIG 1052 ‘Tax Consolidation Accounting’ the allocation of current taxes to tax consolidated group members on the basis of accounting profits is not an acceptable method of allocation given the group’s circumstances, the difference between the current tax amount that is allocated under the tax funding agreement and the amount that is allocated under an acceptable method is recognised as a contribution/distribution of the subsidiaries’ equity accounts. The group has applied the group allocation approach in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group.

8. Dividends Paid and ProposedDuring the financial year, no amount has been paid or declared by the economic entity by way of a dividend. The balance of the company’s franking credit account at 31 December 2009 is nil (year ended 31 December 2008: nil).

ANNUAL REPORT 2009

59

9. Basic loss per share Consolidated

31 Dec 2009 31 Dec 2008

Basic and diluted loss per share (cents) (0.04) (0.01)

Calculated based on:

Weighted average number of fully paid ordinary shares 645,254,632 527,381,180

Loss attributable to members of parent (26,070,000) (6,483,000)

10. Cash and cash equivalentsConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Restricted cash* 4,009 1,108 - -

Short-term deposits 10,607 37,873 5,645 743

Cash 652 273 275 205

15,268 39,254 5,920 948

* The restricted cash refers to the on-going dispute with Grinaker. The details of the dispute are provided in note 27.

11. Trade and other receivables (Current)Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Trade receivables 6,714 392 11 -

Amounts due from related parties - 130 80,293 -

GST/VAT receivable 14 724 14 28

Taxation receivable 220 81 - -

Prepayments 25 - 25 9

6,973 1,327 80,343 37

Trade and other receivables are non-interest bearing and generally settled on 30-day terms. For terms and conditions relating to related party receivables refer to note 31.

i) Fair value and credit riskDue to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it group policy to transfer (on-sell) receivables to special purpose entities.

ii) Allowance for impairment lossNo impairment loss has been recognised as no amounts are past due and are expected to be collected in full when due.

iii) Ageing AnalysisAt 31 December, all trade and other receivables were current (2008: current).

12. InventoriesConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Spares and consumables 2,244 45 - -

2,244 45 - -

Inventories are carried at cost.

60


13. Available for sale assetsConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Listed shares at fair value – Investec Limited - 5,922 - -

- 5,922 - -

The Investec shares were acquired as part of a share swap agreement entered into with Trinity Asset Management (Pty) Ltd and are measured through profit or loss.

14. Receivables (Non-current)Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Security deposit – Lease rental 18 - 18 18

Amounts due from related parties - - 10,712 -

18 - 10,730 18

Further details on related parties are provided in Note 31.

(a) Fair valuesDue to the nature of the receivables their carrying value is assumed to approximate their fair value.

(b) ImpairmentReceivables classified as non-current are not impaired.

(c) Risk exposureInformation about the group’s and the parent entity’s exposure to credit risk, foreign exchange and interest rate risk is provided in note 2. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above.

15. Held-to-maturity investmentsConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Held-to maturity investment in rehabilitation fund 1,293 1,147 - -

1,293 1,147 - -

The group invested in a Guardrisk policy to enable it to furnish a guarantee to the Department of Mineral Resources as a financial provision for future rehabilitation expenditure on Modder East. Premiums are paid in accordance with the policy, an initial premium in advance of A$1 million was made during the 2007 financial year and was followed by the first of 2 annual premiums of A$144,451 in 2008, the additional A$151,365 was payable in 2009. Guardrisk will invest the funds in a money market investment and has furnished a Guarantee of A$ 3 million to the Department of Mineral Resources. The group earns investment income on a credit balance and the policy will mature after 3 years after which the balance on the account will be refunded to the group. Any claim for rehabilitation will be paid by Guardrisk. Claims in excess of the fund balances are owed to Guardrisk at a prime rate.

16. Investment in subsidiariesConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Investment in subsidiaries - - 295,633 -

- - 295,633 -

The investment represents the investment in Gold One Africa, which in turn has investments in the New Kleinfontein Mining Company and its subsidiaries and Etendeka Prospecting and Mining Company (Pty) Ltd. The Modder East project is the most significant asset in the group.

ANNUAL REPORT 2009

61

17. Property, plant and equipmentConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

i) Plant and EquipmentMotor vehicles, computer and office equipment at cost 27,884 15,420 199 88

Accumulated depreciation (4,859) (2,853) (87) (44)

Net carrying amount 23,025 12,567 112 44

Reconciliation

Net carrying amount at the beginning of the period 12,567 6,140 44 27

Additions 15,642 9,096 155 31

Foreign translation currency reserve (239) 6 - -

Depreciation charge for the year (4,945) (2,675) (87) (14)

Net carrying amount at the end of the period 23,025 12,567 112 44

ii) Undeveloped propertiesUndeveloped properties at cost 16,748 17,073 - -

Accumulated depreciation - - - -

Net carrying amount 16,748 17,073 - -

Reconciliation

Net carrying amount at the beginning of the period 17,073 18,400 - -

Additions - - - -

Foreign translation currency reserve (325) (1,327) - -

Depreciation charge for the year - - - -

Net carrying amount at the end of the period 16,748 17,073 - -

iii) Mine development costs and plant facilitiesMine development and plant facilities at cost 103,254 69,898 - -

Accumulated depreciation (704) - - -

Net carrying amount 102,550 69,898 - -

Reconciliation

Net carrying amount at the beginning of the period 69,898 21,867 - -

Additions 35,689 46,442 - -

Foreign translation currency reserve (2,333) 1,589 - -

Depreciation for the year (704) - - -

Net carrying amount at the end of the period 102,550 69,898 - -

Total Property, Plant and Equipment 142,323 99,538 112 44

62


18. IntangiblesConsolidated Goodwill Total

31 Dec 2009 31 Dec 2009

A$’000 A$’000

At 1 January 2009 - -

Acquisition of a subsidiary 5,127 5,127

Impairment (5,127) (5,127)

At 31 December 2009 - -

Goodwill represented the excess of the cost of an acquisition over the fair value of the group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition. The goodwill arose on reverse acquisition of BMA Gold by Aflease Gold. The goodwill was allocated to the Twin Hills assets in Australia. Twin Hills was subsequently sold in July 2009 and the goodwill has been derecognised.

Following the sale of the Twin Hills assets in Australia, goodwill, which was allocated in full against the reverse acquisition transaction, to the value of A$5,127,000 was derecognised.

19. Trade and other payablesConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Trade payables 10,340 7,010 1,583 395

Payable to controlled entity - - - 45

10,340 7,010 1,583 440

(a) Fair value and impairmentDue to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

20. ProvisionsConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Employee benefits provisions 1, 176 574 106 -

Other provisions 421 162 5 14

1,597 736 111 14

Trade and other payables and provisions are non-interest bearing and generally settled on 30-day terms. For terms and conditions relating to related party payables refer to note 31.

(a) Rehabilitation costRehabilitation costs are expected when exploration, evaluation and development activities give rise to the need for restoration. The costs include obligations relating to reclamation, waste site closure, plant closure and other costs associated with the restoration of the site. These estimates of the restoration obligations are based on current technology and legal requirements and future costs. Any changes in the estimates are adjusted on a prospective basis. In determining the restoration obligations, the entity has assumed no significant changes will occur in the relevant Australian and South African legislation in relation to restoration of such mines in the future.

ANNUAL REPORT 2009

63

21. Financial liabilities designated at fair valueFinancial liabilities consist of convertible bonds classified as financial liabilities at fair value through profit & loss.

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Fair value of convertible bond 80,293 93,846 80,293 -

At the end of the period 80,293 93,846 80,293 -

Reconciliation of convertible bond:

Opening balance 93,846 99,780 - -

Fair value adjustment 7,818 - - -

Convertible bond value before cancellation 101,664 - - -

Convertible bond cancelled (101,664) - - -

Re-issued bond in US dollars 101,664 - 101,664 -

Interest accrued on bond 339 - 339 -

Repurchase of bond (13,481) - (13,481) -

Fair value adjustments (8,229) (5,934) (8,229) -

Balance at 31 December 2009 80,293 93,846 80,293 -

In 2007, 600 8.5% convertible bonds were issued by Aflease Gold Limited at a nominal value of R 1 million per bond. As a result of the reverse acquisition arrangement in 2009, the original bonds issued were replaced on 25 May 2009, with 600 8.5% convertible bonds at a total nominal value of US $ 71.598 million. The bonds mature in November 2012, 5 years from the original issue date at the redemption value of 109.6% of the nominal value unless converted into the group’s ordinary shares at the holder’s option, at any time during the conversion period. All or some of the bonds can be converted at a fixed rate of 266,058 shares per bond.

At any time on or after 12 December 2009 the group may redeem all, but not some only, of the bonds for the time being outstanding at their accreted principal amount, which represents on the relevant date a gross yield to maturity identical to that applicable in the case of redemption on the Maturity date, together with interest accrued to the date fixed for redemption. This option is exercisable only if the market value of the ordinary shares has accreted with more than 150% of the conversion price. 61 bonds were re-purchased during the year under review after the bondholders had approved a partial buyback.

In addition, the group has the option to redeem all the bonds, and not some only, at any time, at their accreted principal amount together with interest accrued to the date fixed for redemption, if 85% or more of the originally issued bonds have been exercised and/or purchased and cancelled.

The holders have the option to put the bonds to the group at the accreted principal amount plus accrued interest on the third anniversary of the closing date, being 12 December 2010.

The following debt covenants apply to the convertible bonds:

• GoldOnemaynotcreateorallowanyadditionalindebtednessinrelationtotheModderEastproject;

• GoldOnemaynotcreateorallowanyadditionalindebtednessinrelationtoanyotherprojectunlesssuchindebtednesscomplieswiththeapplicable earnings restriction and debt/equity ratio;

• GoldOneisnotpermittedtosellordisposeofanykeyassetswithouttheconsentofthebondholders;and

• GoldOneisnotpermittedtosellanyotherassetsotherthanonarmslengthandcommerciallyreasonableterms.

The best evidence of fair value at initial recognition is the transaction price (i.e. the fair value of the consideration given or received), unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets.

The timing of recognition of deferred day one profit and loss is determined individually. It is either amortised over the life of the transaction, deferred until the instrument’s fair value can be determined using market observable inputs, or realised through settlement. The financial instrument is subsequently measured at fair value, adjusted for the deferred day one profit and loss. Subsequent changes in fair value are recognised immediately in the statement of comprehensive income without reversal of deferred day one profits and losses. The group has elected to amortise the deferred day one profit and loss over the life of the transaction. The day one loss is carried as part of the fair value of the convertible bond and the amount released to profit and loss is included in the fair value adjustment on the convertible bond. The outstanding day one loss was expensed at the time the bonds were cancelled and re-issued.

64


22. Provisions (Non-current)Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Provision for rehabilitation 3,021 2,352 - -

3,021 2,352 - -

The rehabilitation trusts have been set up as sinking funds for the purposes of the environmental rehabilitation and closure costs. The trust deed prohibits use of the funds for any other purpose. The associated long lived assets are in the East Rand region. The liability for the entire East Rand excluding the old plant and slimes dam entails the plugging of the shafts and cover with topsoil. The old plant will be demolished and the small slimes dam will be cleaned and vegetated.

23. Contributed EquityConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

(i) Ordinary Shares - see below 130,215 66,179 388,925 62,908

130,215 66,179 388,925 62,908

Fully paid ordinary shares carry one vote per share and carry the

right to dividends.

Consolidated Consolidated Parent Parent

Shares A$ Shares A$

(ii) Movement in ordinary shares on issue

At 31 December 2007 524,132,006 59,921,715 437,823,415 62,270,849

Issued during the year 31,369,863 6,304,700 45,190,711 723,879

Issued on exercise of share options 650,000 58,791 - -

Transaction costs on share issue - (106,439) - (87,107)

At 31 December 2008 556,151,869 66,178,767 483,014,126 62,907,621

Issued prior to the scheme of arrangement 101,565,915 21,032,068 - -

Issued on exercise of options prior to the scheme of arrangement 2,800,000 282,646 - -

Transaction costs prior to the scheme of arrangement - (23,067) - -

20 for 1 Share consolidation - - (458,862,894) -

Balance before reverse acquisition 660,517,784 87,470,414 24,151,232 62,907,621

Elimination of existing legal acquiree shares (660,517,784) - - -

Shares of legal acquirer at acquisition date 24,151,232 - - -

Issue of shares on acquisition 660,517,784 7,355,387 660,517,784 290,627,825

Balance after reverse acquisition 684,669,016 94,825,801 684,669,016 353,535,446

Issued on 2 June 2009 for cash on exercise of listed options 60 43 60 43

Issued on 9 July 2009 for cash under a share placement 33,600,000 10,577,280 33,600,000 10,577,280


Issued on 9 July 2009 in respect of the Tulo acquisition 230,240 73,677 230,240 73,677

Issued on 24 August 2009 for cash on exercise of unlisted options 67,500 13,797 67,500 13,797

Issued on 31 August 2009 for cash under a share placement 80,689,990 25,401,209 80,689,990 25,401,209

Transaction costs on share issue - (1,311,506) - (1,311,506)

Issued on 4 September 2009 for cash under a share placement 5,710,010 1,797,511 5,710,010 1,797,511


Transaction costs incurred in RSA - (495,189) - (495,189)

At 31 December 2009 804,966,816 130,215,414 804,966,816 388,925,059

ANNUAL REPORT 2009

65

(iii) Terms and conditions of contributed equityOrdinary fully paid shares have the right to receive dividends as declared, and in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary fully paid shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

(iv) Unlisted share optionsAt balance sheet date there were 53,607,549 (2008: 37,543,991) unlisted options issued by the group and 32,033,573 (2008: 22,539,898) issued by the company which entitle the option holder, subject to the terms and conditions of the options, one ordinary fully paid share for each option held.

(v) Listed share optionsAt balance sheet date there were 6,562,498 (2008: Nil) listed options outstanding for both parent and group which entitles the option holder subject to the terms and conditions of the options, one ordinary fully paid share for each option held. The exercise price is 50 cents, with no vesting period and they expire after 5 years on 12 October 2012.

(vi) Capital managementWhen managing capital, management’s objective is to ensure the entity continues as a going concern and maintain a capital structure that ensures the lowest cost of capital available to the entity. As the market is constantly changing, management may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The group is not subject to any externally imposed capital requirements.

24. Retained earnings and reserves(a) Reserves

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Unlisted options reserve 3,729 3,037 11,128 2,597

Listed options reserve 1,470 - 1,470 1,470

Foreign currency translation reserve (8,927) (3,225) - -

(3,728) (188) 12,598 4,067

Movements

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Unlisted options reserve

Opening balance 3,037 1,794 2,597 2,041

Options exercised - (650) - -

Employee share plan expense 3,451 1,893 1,491 556

Transfer of share reserve - - 4,997 -

Closing balance 6,488 3,037 9,085 2,597

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Listed options reserve

Opening balance - - 1,470 1,427

Issue of share options - - - 43

Closing balance - - 1,470 1,470

66


Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Foreign currency translation

Opening balance (3,225) - - -

Currency translation differences arising during the year (6,993) (3,225) - -

Closing balance (10,218) (3,225) - -

(b) Retained earningsMovements in retained profits were as follows:

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Opening balance (27,549) (21,066) (66,382) (64,134)

Net loss for the year (26,070) (6,483) (16,412) (2,248)

Balance 31 December 2009 (53,619) (27,549) (82,794) (66,382)

(c) Nature and purpose of reserves

Unlisted options reserveThe unlisted options reserve is used to record the value of share based payments provided to employees and consultants, as part of the remuneration for their services.

Listed options reserveThe listed options reserve is used to record the value of options issued to parties through the raising of capital.

Foreign currency translationExchange differences arising on translation of the foreign controlled entity are recognised in the statement of comprehensive income and accumulated as reserves within equity.

25. Auditors remunerationDuring the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

(a) PricewaterhouseCoopers AustraliaConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Audit and assurance services 162 - 162 -

Due diligence 228 - 228 -

Total remuneration for audit and assurance services 390 - 390 -

(b) Related practices of PricewaterhouseCoopers AustraliaConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

PricewaterhouseCoopers South Africa

Audit and assurance services 188 94 114 -

Due diligence service 368 25 341 -

Tax services 34 3 31 -

590 122 486 -

ANNUAL REPORT 2009

67

(c) Other audit firmsConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Ernst and Young Australia

Audit and assurance services 7 - 7 81

Other services 2 - 2 8

9 - 9 89

26. Commitments Mining and Exploration TenementsIn order to maintain rights of tenure on mining and exploration tenements, the company and the consolidated entity are required to outlay certain annual expenditures. The expenditure commitment is estimated at A$1,608,000 (2008: A$300,000) for the 2010 financial year. All commitments relate to the next 12 months.

Guarantees, capital and operating lease commitments

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Guarantees 1,174 4,033 - -

Capital commitments 1,506 10,670 - -

Operating lease commitments 156 585 126 53

2,836 15,288 126 53

GuaranteesThe guarantees relate to performance bank and insurance guarantees with the Department of Mineral Resources for the environmental rehabilitation of land, as well as performance guarantees with Eskom for energy.

Capital commitmentsThe capital commitments relate to capital expenditure commitments contracted for the end of the reporting period.

Operating lease commitmentsThe operating lease commitment relates to the lease for the farm Cloverfield, Parktown offices and Australia offices.

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

The future aggregate minimum lease payment under non-cancellable operating leases are:

No later than 1 year 102 15 87 57

Later than 1 year but not later than 5 years 343 17 287 61

Later than 5 years 138 19 85 65

27. ContingenciesTermination AgreementsThe economic entity has contingent liabilities in respect of termination benefits which may arise pursuant to service agreements entered into with executives and employees who take part in the management of the economic entity. The maximum amount of the contingent liability is dependent upon the circumstances in which the employment is terminated. Accordingly no provision has been made in the accounts as no executive has been terminated. The termination liability as at 31 December 2009 for executives is A$2,144,929 (2008: A$1,327,520). The details of executive employee contracts are provided in note 14 of the Directors report.

Grinaker-LTA MiningAt the beginning of August 2009, a dispute was declared between New Kleinfontein Goldmine (Pty) Limited (“NKGM”), a wholly-owned subsidiary of Gold One, and Grinaker-LTA Mining Contracting, a business unit of Aveng (Africa) Limited (“Grinaker”), regarding a claim by

68


Grinaker for payment of the sum of A$4,009,000 under the Contract Works Agreement for the sinking of the vertical shaft at Modder East. This is the restricted cash balance referred to in note 10.

The dispute was referred to arbitration in August 2009 on the basis that Grinaker completes the sinking of the vertical shaft and NKGM pays the sum of A$4, 009,000 into trust pending the arbitrator’s ruling. NKGM duly paid the sum of A$4,009,000 into trust and Grinaker has in the interim completed the sinking of the vertical shaft, the erection of the headgear and the commissioning of the winder.

NKGM contends that:

• Thecontractwasforafixedprice,plusescalationinaccordancewiththecontractpriceadjustmentformulaeandagreedvariations;

• Grinakerwasunabletoachievethesinkingrateaspertheconstructionprogramandasaconsequencewasnotabletocompletetheshaftwithin the prescribed period; and

• TheadditionalcostsincurredbyGrinakerasaresultofitnotcompletingtheshaftwithintheprescribedperiodareforitsownaccount.

NKGM does not admit being indebted to Grinaker in the sum of A$4,009,000. In addition, the said amount was not paid into trust as a tender or admission of liability, but solely in terms of the arbitrator’s directive.

The arbitration is ongoing and no date has been fixed for a hearing.

28. Reconciliation of loss before income tax to net cash outflow from operating activitiesConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Loss before income tax (30,801) (6,018) (22,347) (2,248)

Adjusted for:

Provision for inter-company loan - - - 576

Fair value adjustment on financial liability 411 (1,998) 8,229 -

Interest accrued on financial liability 339 - 339 -

Share based payments 3,451 1,893 1,491 556

Depreciation/amortisation 5,285 120 88 14

Profit / (loss) on investment 922 7 - -

Impairment of assets 5,127 - 2 -

Non-cash exploration expense - 289 - -

Increase/(decrease) in accounts payable (2,575) 2,189 6,161 136

(Increase) in inventory (2,199) - - -

(Increase)/decrease in accounts receivable (5,507) (373) 3,507 9

Cash flows from operating activities (25,547) (3,891) (2,530) (957)

29. Share Based Payment PlansShare options have been granted as an incentive component in the remuneration arrangements for senior executives and managers. The contractual life of each option granted is 3 to 5 years and the market price of the options is set at the market price of the shares at the grant date. There are no cash settlement alternatives.

Share Options on issue to key management personnel and employees of the group and parent entity at 31 December 2009 are as follows:

Table 1 – Group – Share Based Payment Plans

Grant date Expiry date Exercise priceBalance start of

yearNo. Granted


Exercised

No. Replaced/ Expired/

Forfeited/ Modified

Balance end of year

10/04/2005 10/04/2010 R 0.65 2,800,000 - (2,800,000) - -

11/12/2006 11/12/2011 R 2.80 2,264,742 - - (287,671) 1,977,071

14/09/2007 14/09/2012 R 2.44 327,015 - - - 327,015

3/10/2007 3/10/2012 R 2.72 635,829 - - - 635,829

12/11/2007 12/11/2012 R 3.13 1,067,000 - - - 1,067,000

11/12/2007 11/12/2012 R 2.79 1,184,675 - - - 1,184,675

20/12/2007 20/12/2012 R 2.62 711,370 - - (211,370) 500,000

ANNUAL REPORT 2009

69


yearNo. Granted


Exercised

No. Replaced/ Expired/

Forfeited/ Modified

Balance end of year

12/06/2008 12/06/2013 R 2.01 9,063,615 - - - 9,063,615

24/06/2008 24/06/2013 R 2.04 7,247,770 - - (59,600) 7,188,170

1/08/2008 1/08/2013 R 2.25 578,200 - - - 578,200

25/09/2008 25/09/2013 R 1.74 459,000 - - - 459,000

23/10/2008 23/10/2013 R 1.45 459,000 - - - 459,000

11/12/2008 11/12/2013 R 1.35 8,960,775 - (67,500) 2,963,799 11,857,074

5/01/2009 5/01/2014 R 1.35 - 441,450 - - 441,450

19/01/2009 19/01/2014 R 1.35 - 82,546 - - 82,546

2/02/2009 2/02/2014 R 1.35 - 293,377 - - 293,377

9/02/2009 9/02/2014 R 1.35 - 203,558 - - 203,558

16/02/2009 16/02/2014 R 1.35 - 174,945 - - 174,945

24/02/2009 24/02/2014 R 1.47 - 59,600 - - 59,600

23/04/2009 23/04/2014 R 1.43 - 478,000 - - 478,000

4/05/2009 4/05/2014 R 1.43 - 478,000 - - 478,000

6/05/2009 6/05/2014 R 1.43 - 295,500 - - 295,500

6/10/2009 6/10/2014 R 1.93 - 2,023,000 - - 2,023,000

12/10/2009 12/10/2014 R 1.93 - 1,310,000 - - 1,310,000

21/12/2009 21/12/2014 R 2.12 - 6,695,924 - - 6,695,924

12/01/2006 31/12/2011 A 6.64 30,000 - - (30,000) -

7/06/2006 26/05/2009 A 6.90 10,000 - - (10,000) -

7/06/2006 26/05/2009 A 5.86 5,000 - - (5,000) -

3/10/2006 3/10/2011 A 6.10 125,000 - - (125,000) -

12/03/2008 12/03/2013 A 1.00 1,375,000 - - - 1,375,000

26/03/2008 26/03/2013 A 0.40 240,000 - - (240,000) -

21/01/2009 21/01/2014 A 0.22 - 4,400,000 - - 4,400,000

37,543,991 16,935,900 (2,867,500) 1,995,158 53,607,549

No option holder has any right under the options to participate in any other share issue of the company unless the option holder exercises that option and becomes the holder of Gold One shares prior to the record date for the issue of the shares. Share options held under the Aflease group share option schemes were cancelled and re-issued under Replacement Option Terms. Share options held under the BMA Gold share option scheme were unaffected. New share options are issued under the Gold One International Limited Share Incentive Scheme approved by shareholders on 26 August 2009.

Table 2 – Parent – Share Based Payment Plans


priceBalance start

of yearNo. Granted




year

11/12/2006 11/12/2011 R 2.80 - - - 1,246,575 1,246,575

14/09/2007 14/09/2012 R 2.44 - - - 295,500 295,500

3/10/2007 3/10/2012 R 2.72 - - - 157,829 157,829

12/11/2007 12/11/2012 R 3.13 - - - 1,067,000 1,067,000

11/12/2007 11/12/2012 R 2.79 - - - 216,160 216,160

20/12/2007 20/12/2012 R 2.62 - - - 500,000 500,000

12/06/2008 12/06/2013 R 2.01 - - - 3,525,769 3,525,769

24/06/2008 24/06/2013 R 2.04 - - - 7,068,970 7,068,970

11/12/2008 11/12/2013 R 1.35 - - (67,500) 6,389,424 6,321,924

23/04/2009 23/04/2014 R 1.43 - 478,000 - - 478,000

4/05/2009 4/05/2014 R 1.43 - 478,000 - - 478,000

6/05/2009 6/05/2014 R 1.43 - 295,500 - - 295,500

6/10/2009 6/10/2014 R 1.93 - 2,023,000 - - 2,023,000

12/10/2009 12/10/2014 R 1.93 - 478,000 - - 478,000

70



priceBalance start

of yearNo. Granted




year

21/12/2009 21/12/2014 R 2.12 - 2,106,346 - - 2,106,346

12/01/2006 31/12/2011 A$ 6.64 30,000 - - (30,000) -

7/06/2006 26/05/2009 A$ 6.90 10,000 - - (10,000) -

7/06/2006 26/05/2009 A$ 5.86 5,000 - - (5,000) -

3/10/2006 3/10/2011 A$ 6.10 125,000 - - (125,000) -

12/03/2008 12/03/2013 A$ 1.00 1,375,000 - - - 1,375,000

26/03/2008 26/03/2013 A$ 0.40 240,000 - - (240,000) -

21/01/2009 21/01/2014 A$ 0.22 - 4,400,000 - - 4,400,000

1,785,000 10,258,846 (67,500) 20,057,227 32,033,573

No option holder has any right under the options to participate in any other share issue of the company unless the option holder exercises that option and becomes the holder of Gold One shares prior to the record date for the issue of the shares. Share options held under the Aflease Group share option schemes were cancelled and re-issued under Replacement Option Terms. Share options held under the BMA Gold share option scheme were unaffected. New share options are issued under the Gold One International Limited Share Incentive Scheme approved by shareholders on 26 August 2009.

(a) Fair value of options grantedThe assessed fair value at grant date of options granted during the year ended 31 December 2009 was 12.1 cents per option (2008 – 19.6 cents). The fair value at grant date is independently determined using a Binomial option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The model inputs for the South African options granted during the year to 31 December included:

i) Share price at grant date: market price as quoted on the JSE


iii) Expected volatility: between 41.7% and 92.1%


v) Risk-free interest rate: between 7.0% and 9.3%

The model inputs for the Australian options granted during the year to 31 December included:

i) Share price at grant date: market price as quoted on the ASX


iii) Expected volatility: 67%


v) Risk-free interest rate: 6.19%

30. Key Management Personnel Disclosures(a) Group - Key management personnel compensation

This report presents the compensation for key management personnel of Gold One


payments


A$ A$ A$ A$ A$

Executive Directors


2009 363,275 148,027 - 159,563 670,865

2008 301,571 - - - 301,571


2009 257,320 46,374 - 68,013 371,707

2008 110,253 - - - 110,253

Subtotal Executive Directors 2009 620,595 194,401 - 227,576 1,042,572

2008 411,824 - - - 411,824

Former BMA Gold Executive Directors

ANNUAL REPORT 2009

71


payments


A$ A$ A$ A$ A$

M K Wheatley Managing Director and CEO

2009 200,000* 50,000 - 144,649 394,649

2008 - - - - -

K J Winters Executive Director Finance/Company Secretary

2009 50,000* - - 63,576 113,576

2008 - - - - -

Subtotal Former BMA Gold Executive Directors

2009 250,000 50,000 - 208,225 508,225

2008



2009 76,223 - 2,984 59,917 139,124

2008 - - - - -


2009 11,824 - - 43,778 55,602

2008 - - - - -


2009 17,639 - - 65,656 83,295

2008 18,930 - - - 18,930


2009 11,824 - - 43,778 55,602

2008 - - - - -


2009 17,273 - - 65,656 82,929

2008 15,173 - - - 15,173


2009 23,889 - - 43,718 67,607

2008 - - - - -

W M O’KeeffeResigned 14 April 2009

2009 - - - 12,457 12,457

2008 - - - - -


2008 34,103 - - - 34,103


I J MaraisSenior Vice President: RSA Operations

2009 272,456 81,692 - 111,377 465,525

2008 206,202 - - - 206,202

S CaddySenior Vice President: Projects

2009 113,524 - - 188,260 301,784

2008 - - - - -

P B KrugerCompany Secretary

2009 166,502 37,400 - 121,496 325,398

2008 153,696 - - - 153,696

Subtotal other key managementpersonnel 2009 552,482 119,092 - 421,133 1,092,707

2008 359,898 - - - 359,898

Total directors’ and executives remuneration 2009 1,581,749 363,493 2,984 1,191,894 3,140,120

2008 805,825 - - - 805,825

* Termination payments of A$200,000 and A$50,000 respectively made to M K Wheatley and K J Winters as executives of the former BMA Gold. There were no other termination benefits made to executives or KMP during the financial year ended 31 December 2009 or in the previous financial year.

72


The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

At Risk


2009 2008 2009 2008 2009 2008

Executive directors

N J Froneman 54% 100% 22% - 24% -

C D Chadwick 70% 100% 12% - 18% -


M K Wheatley 51% - 13% - 36% -

K J Winters 44% - - - 56% -


M K Wheatley 55% - - - 45% -

B E Davison 21% - - - 79% -

K V Dicks 36% 100% - - 64% -

W B Harris 21% - - - 79% -

S Swana 21% 100% - - 79% -

K J Winters 20% - - - 80% -

W M O’Keeffe - - - - 100% -


I J Marais 59% 100% 17% - 24% -

S Caddy 38% - - - 62% -

P B Kruger 51% 100% 12% - 37% -

(b) Parent - Key management personnel compensationThis report presents the compensation for key management personnel of Gold One


payments


A$ A$ A$ A$ A$

Executive Directors


2009 211,911 - - 159,563 371,474

2008 - - - - -


2009 150,103 - - 68,013 218,116

2008 - - - - -

Subtotal Executive Directors 2009 362,014 - - 227,576 589,590

2008 - - - - -

Former BMA Executive directors

M K Wheatley Managing Director & CEO

2009 245,872* 50,000 4,128 144,699 444,699

2008 142,267* - 11,066 255,050 408,383

K J WintersExecutive Director Finance / Company Secretary

2009 73,047* - - 63,576 136,623

2008 70,753* - - 37,995 108,748

Subtotal former BMA Executive directors 2009 318,919 50,000 4,128 208,275 581,322

2008 213,020 - 11,066 293,045 517,131



2009 76,223 - 2,984 59,917 139,124

2008 - - - - -


2009 11,824 - - 43,778 55,602

2008 - - - - -

ANNUAL REPORT 2009

73


2009 17,639 - - 65,656 83,295

2008 - - - - -


2009 11,824 - - 43,778 55,602

2008 - - - - -


2009 17,273 - - 65,656 82,929

2008 - - - - -


2009 23,859 - - 43,778 67,637

2008 - - - - -

W M O’KeeffeNon-executive chairman - resigned 14 April 2009

2009 - - - 12,457 12,457

2008 - - - 25,330 25,330


2008 - - - 25,330 25,330


I J Marais 2009 158,933 - - 111,377 270,310

Senior Vice President: RSA Operations 2008 - - - - -

S Caddy 2009 113,524 - - 188,260 301,784

Senior Vice President: Projects 2008 - - - - -

P B Kruger 2009 97,126 - - 121,496 218,622

Company Secretary 2008 - - - - -

Subtotal other key management personnel

2009 369,583 - - 421,133 790,716

2008 - - - - -

Total directors’ and executives remuneration

2009 1,129,808 50,000 7,112 1,161,986 2,348,906

2008 213,020 - 11,066 318,375 542,461

* The amounts were paid to the executives of former BMA Gold prior to the reverse acquisition, including the termination payments.

The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

At Risk


2009 2008 2009 2008 2009 2008

Executive directors

N J Froneman 54% 100% 22% - 24% -

C D Chadwick 70% 100% 12% - 18% -


M K Wheatley 51% - 13% - 36% -

K J Winters 44% - - - 56% -


M K Wheatley 55% - - - 45% -

B E Davison 21% - - - 79% -

K V Dicks 36% 100% - - 64% -

W B Harris 21% - - - 79% -

S Swana 21% 100% - - 79% -

K J Winters 20% - - - 80% -

W M O’Keeffe - - - - 100% -


I J Marais 59% 100% 17% - 24% -

S Caddy 38% - - - 62% -

P B Kruger 51% 100% 12% - 37% -

74


(c) Group - Equity instruments disclosures relating to key management personnelThe numbers of shares in the company held during the financial year by each director of Gold One and other key management personnel of the group, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

Balance1 Jan 2009

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement*

Granted aspart of

remunerationShare


31 Dec 2009

M K Wheatley - - 60,000 - - - 60,000

N J Froneman 170,000 - - - - - 170,000

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana 50,000 - - - - - 50,000

K J Winters - - - - - - -

I J Marais 20,000 - - - - - 20,000

S Caddy - - - - - - -

P B Kruger - - 5,000 - - - 5,000

* 20 for one share consolidation undertaken in May 2009. The re-issue of options is as a result of the reverse acquisition by Aflease Gold. Shares previously issued by Aflease Gold were re-stated at Gold One.

Balance1 Jan 2008

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement

Granted aspart of

remunerationShare


31 Dec 2008

M K Wheatley - - - - - - -

N J Froneman 170,000 - - - - - 170,000

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana 50,000 - - - - - 50,000

K J Winters - - - - - - -

I J Marais - - 20,000 - - - 20,000

S Caddy - - - - - -

P B Kruger - - - - - - -

(d) Parent - Equity instruments disclosures relating to key management personnelThe numbers of shares in the company held during the financial year by each director of Gold One and other key management personnel of the Parent, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

Balance1 Jan 2009

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement

Granted aspart of

remunerationShare


31 Dec 2009

M K Wheatley 6,650,000 - 60,000 - - (6,317,500) 392,500

N J Froneman - - 170,000 - - - 170,000

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana - - 50,000 - - - 50,000

K J Winters 3,165,022 - - - - (3,006,770) 158,252

I J Marais - - 20,000 - - - 20,000

S Caddy - - - - - - -

P B Kruger - - 5,000 - - - 5,000

W M O’Keeffe - - - - - - -


ANNUAL REPORT 2009

75

Balance1 Jan 2008

Cancelledshares

Sharesacquired on

open market

Issued onscheme of

arrangement*

Granted aspart of

remunerationShare


31 Dec 2008

M K Wheatley 400,000 - 6,250,000** - - - 6,650,000

N J Froneman - - - - - - -

C D Chadwick - - - - - - -

B E Davison - - - - - - -

K V Dicks - - - - - - -

W B Harris - - - - - - -

S Swana - - - - - - -

K J Winters 1,540,022 - 1,625,000** - - - 3,165,022

I J Marais - - - - - - -

S Caddy - - - - - -

P B Kruger - - - - - - -

W M O’Keeffe - - - - - - -


** Purchase of shares as announced in Entitlement Issue Prospectus (10 June 2008) following approval of shareholders at General Meeting dated 4 August 2008.

(e) Group - Equity instruments disclosures relating to key management personnelThe numbers of options over ordinary shares in the company held during the financial year by each director of Gold One and other key management personnel of the group, including their personally related parties, are set out below.


Balance1 Jan 2009


Issued onscheme of


otherBalance

31 Dec 2009 2009 2008

M K Wheatley - 1,500,000 17,620,000 (16,739,000)** 2,381,000 1,400,000 -

N J Froneman 6,877,743 - 6,877,743 (6,877,743)^ 6,877,743 1,508,268 1,508,268

C D Chadwick 3,740,645 - 3,740,645 (3,740,645)^ 3,740,645 749,370 749,370

B E Davison - 450,000 - - 450,000 150,000 -

K V Dicks 640,171 250,000 640,171 (640,171)^ 890,171 83,333 -

W B Harris - 450,000 - - 450,000 150,000 -

S Swana 640,171 250,000 640,171 (640,171)^ 890,171 200,833 213,390

K J Winters - 800,000 7,962,007 (7,563,506)** 1,198,501 500,000 -

I J Marais 4,654,566 - 4,654,566 (4,654,566)^ 4,654,566 1,028,646 1,028,658

S Caddy - 1,067,000 - - 1,067,000 355,667 -

P B Kruger 2,339,977 478,000 2,339,977 (2,339,977)^ 2,817,977 563,043 499,600



^ Represents share options cancelled and replaced by Gold One share options.


31 Dec 08

Balance1 Jan 2008


Net changeother

Balance 31 Dec 2008


NotExercisable

N J Froneman - 6,877,743 - - 6,877,743 1,508,268 5,369,475

C D Chadwick - 3,740,645 - - 3,740,645 749,370 2,991,275

K V Dicks 390,171 250,000 - - 640,171 - 640,171

S Swana 390,171 250,000 - - 640,171 213,390 426,781

I J Marais 1,067,000 3,587,566 - - 4,654,566 1,028,658 3,625,908

P B Kruger 445,500 1,894,477 - - 2,339,977 499,600 1,840,377

76


(f) Parent - Equity instruments disclosures relating to key management personnelThe numbers of options over ordinary shares in the company held during the financial year by each director of Gold One and other key management personnel of the Parent, including their personally related parties, are set out below.

Balance1 Jan 2009

Granted as part of

remuneration

Issued on scheme of


other**Balance

31 Dec 2009


2009 2008

M K Wheatley 17,620,000 1,500,000 - (16,739,000) 2,381,000 1,400,000 212,500

N J Froneman - - 6,877,743 - 6,877,743 1,508,268 -

C D Chadwick - - 3,740,645 - 3,740,645 749,370 -

B E Davison - 450,000 - - 450,000 150,000 -

K V Dicks - 250,000 640,171 - 890,171 83,333 -

W B Harris - 450,000 - - 450,000 150,000 -

S Swana - 250,000 640,171 - 890,171 200,833 -

K J Winters 7,962,007 800,000 - (7,563,505) 1,198,501 500,000 -

I J Marais - - 4,654,566 - 4,654,566 1,028,646 75,000

S Caddy - 1,067,000 - - 1,067,000 355,667 -

P B Kruger - 478,000 2,339,977 - 2,817,977 563,043 -

* Replacement options in Gold One were issued in lieu of options held by employees of Aflease Gold and which have been granted to these employees over a number of years as part of their employment arrangements.

** Includes effect of 20 for 1 share consolidation.

Balance1 Jan 2008

Granted as part of

remuneration ExercisedNet change

otherBalance

31 Dec 2008

Vested at 31 Dec 08

ExercisableNot

Exercisable

M K Wheatley 2,620,000 15,000,000 - - 17,620,000 5,620,000 12,000,000

K J Winters 462,007 7,500,000 - - 7,962,007 1,962,007 6,000,000


For details on the valuation of the options, including models and assumptions used, please refer to note 29. There were no alterations to the terms and conditions of options granted as remuneration since their grant date. The elements of emoluments have been determined on the basis of the cost to the company. Key management personnel are those directly accountable and responsible for the operational management and strategic direction of the company. Emoluments of key management personnel (other than options) are not related to the performance of the company.

(g) Loans to Key Management PersonnelNo loans were provided during the year to Key Management Personnel (2008: Nil).

31. Related Party Disclosures(a) Parent entity

Gold One International Limited is the ultimate parent entity.

(b) SubsidiariesInterests in subsidiaries are set out in note 34.

(c) Key management personnelDisclosures relating to key management personnel are set out in note 30.

ANNUAL REPORT 2009

77

(d) Loans receivable from related parties

Consolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Twin Hills Operations (Pty) Ltd* - - - 37,881

Gold One Africa Limited - - 91,073 -

Total amount receivable from related parties - - 91,073 37,881

* These loans were assessed for impairment and accordingly written-off.

32. Events Subsequent to Balance DateRefer to the Company Review on pages 6 to 11. In the opinion of the directors, no other matter or circumstance has arisen since 31 December 2009, other than initiatives by Gold One dealing with the possibility of the bondholders exercising their right of put, the re-purchase of 38 convertible bonds and the amendment of the status of Gold One on the Main Board List of the JSE from a primary listing to a secondary listing. In the December quarterly review, Gold One reported that it had proactively initiated a process to pursue the implementation of a bank debt facility and has engaged advisors with regards to this process. The facility is intended to provide Gold One with sufficient liquidity to meet the potential obligation arising from the put option at the election of the bondholders in December 2010. This process has resulted in Gold One selecting two banks from a short list of four banks, one South African and one international, to finalise a debt facility. The successful close of the facility will be subject to agreeing final terms and conditions with the banks as well as the banks obtaining final internal approvals. For avoidance of doubt the proposed facility does not contain an equity component.

33. Business Combination(a) Summary of acquisition

Gold One International Limited (Gold One) (formerly BMA Gold Limited) acquired 100% of the issued shares of One Africa Limited (Gold One Africa) (formerly Aflease Gold Limited) and its subsidiaries on 25 May 2009. In accordance with AASB 3 Business Combination, this acquisition was determined to be a “reverse acquisition”. In the reverse acquisition, the legal acquirer, Gold One, becomes the accounting subsidiary and the legal acquiree, Gold One Africa becomes the accounting acquirer.

The fair value of the shares issued in consideration is A$7,355,000 and was determined based on the fair value of Aflease’s equity at transaction date.

Gold One issued 660,517,784 ordinary shares to acquire Gold One Africa and it’s subsidiaries to the value of A$290,627,825. (Refer note 16: Investment in subsidiaries).

Pre acquisition carrying amounts were determined based on applicable AASBs immediately before the acquisition.

(b) Purchase considerationDetails of the fair value of the assets and liabilities acquired and goodwill are as follows:

A$’000

Purchase consideration 7,355

Fair value of assets acquired (2,295)

Goodwill 5,060

The goodwill is attributable to the acquired Twin Hills assets in Australia.

78


(c) Assets and liabilities acquiredPre-acquisition

carrying amounts

Fair value adjustments

Recognised values on

acquisition

A$’000 A$’000 A$’000

Cash 388 - 388

Property, Plant and Equipment 223 642 865

Exploration, Evaluation and Development 1,500 (500) 1,000

Deferred taxation - 42 42

Net identifiable assets and liabilities 2,111 184 2,295

The consolidated financial statements of Gold One have been prepared as a continuation of the consolidated financial statements of Gold One Africa. Gold One Africa, as the accounting acquirer, has consolidated Gold One from 25 May 2009.

The acquired business, Gold One, contributed a loss of A$1,651,588 to the group from 25 May 2009 to 31 December 2009. If the acquisition had occurred on 1 January 2009, the consolidated loss for the year ended 31 December 2009 would have been A$3,751,588.

34. SubsidiariesThe consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1.

Country of Incorporation Class of Shares

Ownership Percentage

31 Dec 2009 31 Dec 2008

Name of entity % %

Gold One Africa Limited South Africa Ordinary 100 -

Australian Silicon Operations Pty Limited Australia Ordinary 100 100

Twin Hills Operations Pty Limited Australia Ordinary 100 100

Etendeka Prospecting and Mining Company Pty Limited Namibia Ordinary 100 -

New Kleinfontein Mining Company Limited South Africa Ordinary 100 -

GoldOneMozambiqueLimitada(formerlyNobleTrade&Commerce Pty Limitada) Mozambique Ordinary 100 -

New Kleinfontein Gold Mine Pty Limited South Africa Ordinary 100 -

New Kleinfontein Gold Claims Pty Limited South Africa Ordinary 100 -

New Kleinfontein Rehabilitation Trust South Africa Ordinary 100 -

Gold One International Limited Share Incentive Scheme South Africa Ordinary 100 -

35. RevenueConsolidated Parent

31 Dec 2009A$’000

31 Dec 2008A$’000

31 Dec 2009A$’000

31 Dec 2008A$’000

Gold sales 7,041 - - -

Finance income 1,822 9,260 4,593 95

8,863 9,260 4,593 95

ANNUAL REPORT 2009

79

DIRECTORS DECLARATIONfor the year ended 31 December 2009

Directors DeclarationIn the directors’ opinion:

(a) the financial statements and notes set out on pages 38 to 78 are in accordance with the Corporations Act 2001, including:

(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

(ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 December 2009 and of their performance for the financial year ended on that date, and

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, and

(c) at the date of this declaration, there are reasonable grounds to believe that the members of the group identified in note 34 will be able to meet any obligations or liabilities to which they are, or may become liable.

The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

On behalf of the Board

N J Froneman Chief Executive Officer Dated: 26 March 2010Johannesburg

80

INDEPENDENT AUDIT REPORT

ANNUAL REPORT 2009

81

82

SHAREHOLDER INFORMATION

OTHER ASX INFORMATIONAs at 31 December 2009

1. ORDINARY SHARESPursuant to the Listing Requirements of the Johannesburg Stock Exchange Limited, the shareholder information set out below was applicable as at 26 February 2010.

i. Distribution of ShareholdersAnalysisofnumberofshareholdersbysizeandholding:

Holdings Ranges Holders Total Units %

1-1,000 2,754 1,259,841 0.16

1,001-5,000 2,479 6,742,915 0.84

5,001-10,000 924 7,438,506 0.92

10,001-100,000 1,762 60,838,511 7.56

100,001-9,999,999,999 370 728,959,625 90.53

Totals 8,289 805,239,398 100.000

ii. Top Twenty ShareholdersThe twenty largest holders of ordinary fully paid shares are listed below:

Holder Name Shares %

NAVADA TRADING (PTY) LTD 151,074,976 18.76

ANZ NOMINEES LIMITED 128,337,619 15.94

NATIONAL NOMINEES LIMITED 91,595,566 11.37

CITICORP NOMINEES PTY LIMITED 37,328,529 4.64

HSBC CUSTODY NOMINEES 25,489,893 3.16

TITAN NOMINEES (PTY) LTD 23,216,686 2.88

MERRILL LYNCH (AUSTRALIA) 17,818,412 2.21

THE BANK OF NEW YORK MELLON DR 15,561,820 1.93

RESOURCE CAPITAL FUND NLP 13,131,844 1.63

GOLD FIELDS GROUP SERVICES (PTY) LTD 12,500,000 1.55

STANDARD FINANCIAL MARKETS (PTY) LTD 10,562,045 1.31

SUN HUNG KAI INVEST SERV LTD 10,300,000 1.28

T L P INVESTMENTS THIRTY (PTY) LTD 8,370,200 1.64

STATE STREET 7,837,124 0.97

HSBC CUSTODY NOMINEES 7,099,209 0.88

WITNIGEL INVESTMENTS (PTY) LTD 6,406,000 0.79

COGENT NOMINEES PTY LIMITED 3,937,141 0.49

ACCOUNT GSI EQUITY CLIENT 3,054,700 0.38

ADRIAAN CARL REYNOLDS 2,800,000 0.35

576,421,764 71.56

Remainder 228,817,634 28.44

Grand Total 805,239,398 100.00

iii. Voting RightsAll ordinary fully paid shares carry one vote per share without restriction. Share options do not carry a right to vote.

ANNUAL REPORT 2009

83

2 SHARE OPTIONSOptions issued, exercised and forfeited during the year for the group and parent entity are as follows:


yearNo. Granted


Exercised

No. Replaced/ Expired/ forfeited

Balance end of year

10/04/2005 10/04/2010 R0.65 2,800,000 - (2,800,000) - -

11/12/2006 11/12/2011 R 2.80 2,264,742 - - (287,671) 1,977,071

14/09/2007 14/09/2012 R 2.44 327,015 - - - 327,015

3/10/2007 3/10/2012 R 2.72 635,829 - - - 635,829

12/11/2007 12/11/2012 R 3.13 1,067,000 - - - 1,067,000

11/12/2007 11/12/2012 R 2.79 1,184,675 - - - 1,184,675

20/12/2007 20/12/2012 R 2.62 711,370 - - (211,370) 500,000

12/06/2008 12/06/2013 R 2.01 9,063,615 - - - 9,063,615

24/06/2008 24/06/2013 R 2.04 7,247,770 - - (59,600) 7,188,170

1/08/2008 1/08/2013 R 2.25 578,200 - - - 578,200

25/09/2008 25/09/2013 R 1.74 459,000 - - - 459,000

23/10/2008 23/10/2013 R 1.45 459,000 - - - 459,000

11/12/2008 11/12/2013 R 1.35 8,960,775 - (67,500) 2,963,799 11,857,074

5/01/2009 5/01/2014 R 1.35 - 441,450 - - 441,450

19/01/2009 19/01/2014 R 1.35 - 82,546 - - 82,546

2/02/2009 2/02/2014 R 1.35 - 293,377 - - 293,377

9/02/2009 9/02/2014 R 1.35 - 203,558 - - 203,558

16/02/2009 16/02/2014 R 1.35 - 174,945 - - 174,945

24/02/2009 24/02/2014 R 1.47 - 59,600 - - 59,600

23/04/2009 23/04/2014 R 1.43 - 478,000 - - 478,000

4/05/2009 4/05/2014 R 1.43 - 478,000 - - 478,000

6/05/2009 6/05/2014 R 1.43 - 295,500 - - 295,500

6/10/2009 6/10/2014 R 1.93 - 2,023,000 - - 2,023,000

12/10/2009 12/10/2014 R 1.93 - 1,310,000 - - 1,310,000

21/12/2009 21/12/2014 R 2.12 - 6,695,924 - - 6,695,924

12/01/2006 31/12/2011 A 6.64 30,000 - - (30,000) -

7/06/2006 26/05/2009 A 6.90 10,000 - - (10,000) -

7/06/2006 26/05/2009 A 5.86 5,000 - - (5,000) -

3/10/2006 3/10/2011 A 6.10 125,000 - - (125,000) -

12/03/2008 12/03/2013 A 1.00 1,375,000 - - - 1,375,000

26/03/2008 26/03/2013 A 0.40 240,000 - - (240,000) -

21/01/2009 21/01/2014 A 0.22 - 4,400,000 - - 4,400,000

37,543,991 16,935,900 (2,867,500) 1,995,158 53,607,549


84

SHAREHOLDER INFORMATION

3. SCHEDULE OF INTERESTS IN MINING TENEMENTSCurrent Tenement Status In Southern Africa

Project Location Type DMR Reference Date Granted Period of Right Hectares

Sub Nigel 1 Gauteng, South Africa Mining Licence GP (28) MR 15 Jul 2008 30 years 3013,3142

Sub Nigel 4 & 5 Gauteng, South Africa Prospecting Right GP (45) PR 28 Oct 2005 5 years 2643,3942

Sub Nigel 6 Gauteng, South Africa Prospecting Right GP (142) PR 1 Jun 2006 5 years 3860,5435

Sub Nigel 8 Gauteng, South Africa Prospecting Right GP(260) PR 29 May 2007 5 years 6540,7174

Ventersburg 1 Free State, South Africa Prospecting Right FS (24) PR 15 Nov 2006 5 years 9757,8000

Ventersburg 2 Free State, South Africa Prospecting Right FS (477) PR 16 Apr 2008 5 years 2842,0614

Ventersburg 3 Free State, South Africa Prospecting Right FS (565) PR 31 Mar 2009 5 years 416,0100

Bothaville Free State, South Africa Prospecting Right FS (482) PR 16 Apr 2008 5 years 8514,1025

Turnbridge Gauteng, South Africa Prospecting Right GP (31) PR 1 Jun 2006 5 years 1315,4880

Holfontein Gauteng, South Africa Prospecting Right GP (139) PR 1 Jun 2006 5 years 2180,5

Modder East Gauteng, South Africa Mining Licence ML 15/2004 30 Apr 2004 5 years # 3263,7643

Modder East Gauteng, South Africa Mining Permit GP (98) MP 10 Apr 2008 2 years 1,5

Etendeka Kunene Region, Namibia Prospecting Licence EPL 3377 13 Dec 2008 2 years 65685,0

Tulo NiassaProvince,Mozambique Mining Concession MC 557C 28 Mar 2006 25 years 21760,0

#: In terms of the Mineral and Petroleum Resources Development Act 28 of 2002, the company, prior to the expiry of the existing licence, lodged a conversion application with the Department of Mineral Resources. The existing licence accordingly remains valid until the conversion application is granted.

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ANNUAL REPORT 2009 - ShareData · The Bank of New York Mellon Depository Receipts Division 101 Barclay Street 22nd Floor, New York New York 102386 USA . ANNUAL REPORT 2009 5 CHIEF