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RAFRES - Newfunds ErafiTrade Mark SA Resources 20 Index ETF - Summarised audited

Release Date: 29/06/2011 17:07
Code(s): JSE RAFRES
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RAFRES - Newfunds ErafiTrade Mark SA Resources 20 Index ETF - Summarised audited results for the year ended 31 March 2011 NEWFUNDS eRAFITrade Mark SA RESOURCES 20 INDEX ETF Share code: RAFRES ISIN: ZAE000135166 ("eRAFITrade Mark Resources 20 ETF" or "the ETF") A Portfolio in the NewFunds Collective Investment Scheme in Securities registered as such in terms of the Collective Investment Schemes Control Act, 45 of 2002 SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2011 Statement of financial position as at 31 March 2011 2011 2010
R R ASSETS
Non-current assets Investments: eRAFITrade Mark 35 860 875 31 925 746 Resources Portfolio
Current assets 368 451 269 888 Trade and other receivables 59 752 1 791 Cash and cash equivalents 308 699 268 097
TOTAL ASSETS 36 229 326 32 195 634 LIABILITIES Trade and other payables 122 615 97 535 NET ASSETS ATTRIBUTABLE TO INVESTORS 36 106 711 32 098 099 Statement of comprehensive income for the year ended 31 March 2011 2011 2010 R R
Income 722 092 457 111 Dividend income 712 596 455 312 Interest income 9 496 1 799
Realised gains on financial 878 011 1 310 249 instruments designated at fair value through profit or loss Unrealised gains on financial 2 822 862 5 581 382 instruments designated at fair value through profit or loss Expenses Management and administration (414 353) (608 664) expenses Increase in net assets attributable 4 008 612 6 740 078 to investors before tax Income tax expense - - Increase in net assets attributable 4 008 612 6 740 078 to investors before distribution Income distribution - -
Increase in net assets attributable 4 008 612 6 740 078 to investors after distribution Represented by: Income attributable to investors 307 739 (151 553) Capital gain attributable to 3 700 873 6 891 631 investors Statement of changes in net assets attributable to investors for the year ended 31 March 2011 Capital Income Net assets attributable attributable attributable to investors to investors to investors R R R
New creation of 25 358 021 - 25 358 021 eRAFITrade Mark Resources securities
Increase in net assets 6 891 631 (151 553) 6 740 078 attributable to investors
Balance at 31 March 2010 32 249 652 (151 553) 32 098 099 Increase in net assets attributable to investors 3 700 873 307 739 4 008 612 Balance at 31 March 2011 35 950 525 156 186 36 106 711 Statement of cash flows for the year ended 31 March 2011 2011 2010 R R Net cash generated from 38 809 268 097 operating activities Cash utilised from (447 237) (512 920) operations Purchases of securities (5 051 614) (6 343 064) Proceeds from sale of 4 815 568 6 666 970 securities Dividend received 712 596 455 312 Interest received 9 496 1 799 Net movement in cash and 38 809 268 097 cash equivalents Cash and cash equivalents at 268 097 - the beginning of year
Cash and cash equivalents at 308 699 268 097 the end of year NOTES TO THE SUMMARISED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 1. Accounting policies The NewFunds Collective Investment Scheme ("the Scheme") is an open-ended investment scheme incorporated under the Collective Investment Scheme Control Act, 45 of 2002. The Scheme`s objective is to track the eRAFITrade Mark Resources 20 index calculated daily by the independent investment consulting firm Riscura. The ETF invests in 20 companies that fall within the Resource sector based on their underlying value indicators as opposed to market capitalisation. The scheme is mainly managed by Absa Capital, a division of Absa Bank Limited. The financial information incorporates the principal accounting policies set out below which have been applied consistently by NewFunds Collective Investment Scheme for all periods presented. .1 Statement of compliance The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), the AC500 series as issued by the Accounting Practices Board, IAS 34 Interim Financial Reporting and in the manner required by the Collective Investment Schemes Control Act and Trust Deed. The financial statements were authorised for issue by the Board of Directors on 24 June 2011. 1.2 Basis of measurement The financial statements have been prepared on a historical cost basis, except where specifically indicated otherwise in the accounting policies. 1.3 Functional and presentation currency Items included in the financial statements of the funds are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The fund`s financial statements are presented in South African Rand, which is the fund`s functional and presentation currency. 1.4 Financial instruments Recognition and measurement Regular way purchases and sales of financial instruments are accounted for on trade date. All other financial instruments are recognised when the entity first becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus directly attributable transaction costs which are only included in the initial carrying amount of financial instruments that are not designated through profit or loss. Subsequent to initial recognition, these instruments are measured as set out below. Investments Investments are designated at fair value through profit or loss at inception and are financial instruments that are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the Fund`s documented investment strategy. Fair value is determined with reference to quoted market prices as published in the financial press, at reporting date. All changes in fair value, other than dividend income, are recognised in profit or loss as a net gain/(loss) from financial instruments at fair value through profit or loss. The Fund`s policy requires the Asset Managers and Investment Manager Committee to evaluate the information about these investments on a fair value basis together with other related financial information. These investments are expected to be realised at any time at the option of the security holder. Trade and other receivables Trade and other receivables are measured at amortised cost using the effective interest method, less impairment losses. Trade and other receivables are short term in nature and are not discounted. The carrying value approximates the fair value. Cash and cash equivalents Comprises of cash balances and call deposits with an original maturity of three months or less measured at amortised cost at reporting date. The carrying value approximates the fair value. Trade and other payables Measured at amortised cost using the effective interest method. The carrying value approximates the fair value. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial instrument. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Issued securities Financial liabilities arising from securities issued by each portfolio are measured at fair value representing the investor`s right to an interest in the portfolio`s net asset, i.e. the Net Asset Value ("NAV") of the portfolio. The NAV is the total assets of the portfolio less trade and other payables. Changes in the fair value are included in profit or loss in the period in which the change arises and these financial liabilities are designated through profit or loss. The fair value of redeemable securities is measured at the redemption amount that is payable (in cash and in securities, representing each investor`s undivided and vested interest in their assets as a whole, subject to liabilities, as defined by the Scheme`s Trust Deed). In accordance with the Scheme`s Trust Deed, and CISCA, the portfolios are contractually obliged to redeem securities at Net Asset Value. Creations and redemptions Creations and redemptions are recorded on trade date using fair value being the previous day closing index price. Amortised cost is calculated by taking into account any discount or premium on acquisition, and fees and costs that are an integral part of the effective interest rate. The amortisation is included in "Interest income" in profit and loss. The carrying amount of impaired loans on the statement of financial position is reduced through the use of impairment. Redeemable securities All redeemable securities provided by the portfolios provide investors with the right to request redemption for cash or in specie at the value proportionate to each investor`s share. The securities are redeemable at any time at the option of the security holder and are therefore classified as financial liabilities. 1.5 Derecognition of financial instruments Derecognition of financial assets The Scheme derecognises a financial asset when and only when: The contractual rights to the cash flows arising from the financial assets have expired or been forfeited by the Scheme; or It transfers the financial asset including substantially all the risks and rewards of ownership of the assets; or It transfers the financial asset, neither retaining nor transferring substantially all the risks and rewards of ownership of the asset, but no longer retains control of the assets. A financial liability is derecognised when and only when the liability is extinguished, that is, when the obligation specified in the contract is discharged, cancelled or has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss. The difference between the carrying amount of a financial liability (or part thereof) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 1.6 Impairments A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Objective evidence that a financial asset is impaired includes observable data that comes to the attention of the company and may include the following loss event: The disappearance of an active market for that financial asset because of financial difficulties. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between the asset`s carrying amount, and the present value of estimated future cash flows discounted at the financial asset`s original effective interest rate. All impairment losses are recognised in profit or loss. 1.7 Offsetting Financial assets and liabilities are offset and the net amount reported in the statement of financial position when the entity holds a current legally enforceable right to set off the recognised amounts and intends to either settle on a net basis, or realise the asset and settle the liability simultaneously. 1.8 Fair value Some of the Scheme`s financial instruments are measured at fair value through profit or loss, namely those designated by management under the fair value option. The fair value of a financial instrument is the amount at which the instrument can be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The method of determining the fair value of financial instruments can be analysed into the following categories: Unadjusted quoted prices in active markets where the quoted price is readily available and the price represents actual and regularly occurring market transactions on an arm`s length basis. Valuation techniques using market observable inputs. Such techniques may include: using recent arm`s length market transactions; reference to the current fair value of similar instruments; and discounted cash flow analysis, pricing models or other techniques commonly used by market participants. On initial recognition of financial instruments measured using the above techniques the transaction price is deemed to provide the best evidence of fair value for accounting purposes. As such, profits or losses are recognised upon trade inception only when such profits can be measured solely by reference to observable market data. The difference between the model valuation and the initial transaction price 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 valuation techniques in (b) and (c) use inputs such as interest rate yield curves, equity prices, commodity and currency prices/yields, volatilities of the underlying and correlations between inputs. The models used in these valuation techniques are calibrated against industry standards, economic models and to observed transaction prices where available. 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 Scheme has entered into transactions, some of which will mature within one year, where fair value is determined using valuation models for which all inputs are market observable prices or rates. Such a financial instrument is initially recognised at the transaction price, which is the best indicator of fair value, this does not substantially differ from the relevant valuation model. 1.9 Income Income comprises interest income and dividend income. Investment income is that income that is directly related to the return from individual investments. It is recognised to the extent that it is probable that there will be an inflow of economic benefits and the income can be reliably measured. Interest income is recognised on a time-proportionate basis using the effective interest method and includes interest income from debt securities. Dividends from equity investments are recognised in the statement of comprehensive income when the shareholders` rights to receive payment have been established except to the extent that dividends, clearly reflects a realisation of the underlying investments. 1.10 Distributions In accordance with the Scheme`s Trust Deed, the portfolios distribute their distributable income and any other amounts determined by the management company to security holders in cash. The distributions are payable at the end of each quarter. 1.11 Fair value gains and losses Realised profits or losses on the disposal of investments is the difference between the fair value of the consideration received less any directly attributable costs, on the sale of equity investments and the repayment of loans and receivables, and its carrying value at the start of the full reporting period. Unrealised profits or losses on the revaluation of investments are the cumulative movements in the carrying value of investments for every month of the whole year. 1.12 Management and administration expenses Management and administration expenses are recognised in profit or loss when a decrease in future economic benefits related to decrease in an assets or an increase of a liability has arisen that can be measured reliably. It is recognised based on the matching concept where expenses are matched with income. 1.13 Taxation Income is taxed in the hands of the investor if distributed within 12 months, failing which revenue will be deemed to be received by and accrued to the portfolio and will be taxed in its hands. Capital gains and losses are disregarded. 1.14 Use of estimates and judgements The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Provisions Provisions are recognised when the scheme has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are determined by discounting the expected future cash flows at a pre- tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Future operating costs or losses are not provided for. 1.16 New standards and interpretations adopted in the current year There are no new standards adopted in the current year. 1.17New standards and interpretations not yet adopted There are new standards, interpretations and amendments to standards and interpretations relevant to the entity that are not yet effective for the year ended 31 March 2011 and have not been applied in preparing the financial statements. These include the following standards and interpretations that are applicable to the business of the entity and may have an impact on the future financial statements: IAS 24 Related Party Disclosures The revised IAS 24 Related Party Disclosure amends the definition of a related party and modifies certain related party disclosure requirements for government- related entities. Amendments are effective for annual periods beginning on or after 1 January 2011. The amendment might affect the disclosure of the fund`s related parties on the financial statements. IFRS 9 Financial Instruments IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity`s business model and contractual cash flow characteristics of the financial asset. The guidance in IAS 39 on Impairment of financial assets and hedge accounting continues to apply. Amendments are effective for the annual periods beginning on or after 1 January 2013. The Amendment might affect disclosure of NewFunds CIS financial instruments in the financial statements. 1.18 Operating Segments The portfolios, eRAFITrade Mark Overall, NewSA, Shariah, eRAFITrade Mark Financial, eRAFITrade Mark Industrial, eRAFITrade Mark Resources, that trade under the umbrella of the NewFunds Collective Investment Schemes (CIS) as separate exchange traded funds. Each of the mentioned funds is separately listed and trades on the JSE. Thus each of the separate portfolios fall within the scope of IFRS 8: Operating Segments. Comparative segment information has been presented in conformity with the transitional requirements of such standards. The application of the standard only impacts the presentation and disclosure aspect of the financial statements. Audit report KPMG Inc, the NewFunds Collective Investment Scheme`s independent auditor, has audited the annual financial statements of the NewFunds eRAFITrade Mark Resources 20 Index ETF from which the summarised results contained in this announcement have been derived, and has expressed an unmodified opinion on the annual financial statements. Their audit report is available for inspection at the CIS`s registered office. The complete set of financial statements are available on Absa Capital`s website (www.absacapitaletfs.com). Date: 29 June 2011 Sponsor: J.P. Morgan Equities Limited Date: 29/06/2011 17:07:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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