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NRD - Trackhedge (Proprietary) Limited - Summarised audited results for the year

Release Date: 28/06/2012 17:21
Code(s): JSE NRD
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NRD - Trackhedge (Proprietary) Limited - Summarised audited results for the year ended 31 March 2012 TRACKHEDGE (PROPRIETARY) LIMITED (Registration number 2003/008245/07) Issuer code: THG JSE Code: NRD ISIN: ZAE000047841 ("Trackhedge" or "the ETF") SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2012 Statement of financial position as at 31 March 2012 Notes 2012 2011 ASSETS R R Unlisted investments 3 73 450 695 641 322 370 Cash and cash equivalents 4 9 581 9 248 Trade and other receivables 5 9 591 61 307 Current tax receivable 7 068 12 939 TOTAL ASSETS 73 476 935 641 392 925 EQUITY AND LIABILITIES Share capital and reserves (99 557) 29 574 Share capital 6 1 1 Retained Earnings/ (99 558) 29 573 (Accumulated Loss) Liabilities NewRand Index Securities 7 73 450 695 641 322 370 Trade and other payables 8 125 797 40 981 TOTAL EQUITY AND 73 476 935 641 392 925 LIABILITIES Statement of comprehensive income for the year ended 31 March 2012 Notes 2012 2011 R R
Revenue Interest Income 360 106
Trust distribution 51 623 48 368 Write off - -
Unrealised gain on 3 5 490 117 112 889 388 unlisted investments Fair value adjustment on 7 (5 490 117) (112 889 388) NewRand Index Securities Operating profit before 54 983 48 474 operating expenditure Bank Charges (27) - Write off - Receivable (12 939) - Profit before taxation 11 39 017 48 474 Income tax expense 12 (168 148) (13 549) (Loss)/Profit for the (129 131) 34 925 year Total comprehensive 34 925 34 925 income for the year Profit attributable to: Owners of the entity (129 131) 34 925
Statement of changes in equity for the year ended 31 March 2012 Share Retained Total Capital Earnings R R R
Opening Balance as at 1 (5 352) (5 351) April 2010 1
Total comprehensive income 34 925 34 925 for the year Balance at 31 March 2011 1 29 573 29 574 Total comprehensive income (129 131) (129 131) for the year
Balance at 31 March 2012 1 (99 558) (99 557) Statement of cash flows for the year ended 31 March 2012 Notes 2012 2011 R R
Net cash generated from 333 106 operating activities Cash (utilised)/generated by 13.1 110 627 (21 880) operations Taxation paid 13.2 (162 277) (26 488) Interest received 360 106 Trust distribution 51 623 48 368
Net increase in cash and cash 333 106 equivalents
Cash and cash equivalents at 4 9 248 9 142 the beginning of year Cash and cash equivalents at 4 9 581 9 248 end of year NOTES General Information Trackhedge Proprietary Limited (Registration number 2003/008245/07) ("Issuer") is a private company incorporated in the Republic of South Africa, the entire issued share capital is held by the NewRand Owner Trust ("the Trust"), a registered discretionary trust. The Issuer is a special purpose vehicle incorporated for the sole purpose of issuing NewRand Index Securities ("Index Securities") listed on the JSE Limited. Index Securities are created with an objective to track the performance of a customised index of Rand hedge shares created by Absa Capital, a division of Absa Bank Limited and provided and calculated by FTSE and the JSE Limited ("JSE") ("NewRand Index", "Index"). The Index composition and calculation methodology were designed with an objective to maximise long-term correlation with the Rand/USD exchange rate. The address of the registered office is 7th Floor, Absa Towers West, 15 Troye Street, Johannesburg, 2001. 2. Accounting policies The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. 2.1 Statement of compliance The audited financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), Interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC), in the manner required by the Companies Act No 71 of 2008 (as amended), of South Africa and JSE listing requirements. 2.2 Basis of measurement The financial statements have been prepared on an accrual basis of accounting, except for cash flow information. The measurement basis used is the historical cost basis, except for available-for-sale financial assets, financial assets and liabilities held at fair value through profit or loss and all derivative contracts, which have been measured at fair value. 2.3 Functional and presentation currency The financial statements are presented in South African Rand, which is the entity`s functional and presentation currency. All financial information is presented to the nearest Rand. 2.4 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. Management has determined that the underlying assumptions are appropriate and the entity`s financial statements therefore present the financial position fairly. Information about significant areas of estimation uncertainty and critical judgements in applying the accounting policies that have the most significant effect on the amounts recognised in the financial statements are included in the individual notes to the financial statements. 2.5 Recent accounting developments New and amended standards adopted by the company There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 April 2011 that have a material impact on the company. New standards, amendments and interpretations issued but not effective for the financial year beginning 1 April 2011 and not early adopted New standards, amendments and interpretations issued but not effective for the financial year beginning 1 April 2011 and not early adopted IFRS 7 `Financial Instruments Disclosures` (amendments) require additional quantitative and qualitative disclosures in respect of risk exposures arising from transferred financial assets. The amendments include a requirement to disclose by class of asset: the nature, carrying amount and a description of the risks and rewards of financial assets that have been transferred to another party yet remain on the Company`s statement of financial position. Disclosures are also required to enable a user to understand the amount of any associated liabilities, and the relationship between the financial assets and associated liabilities. Comparative disclosures are not required for any period beginning before the effective date. The amendments are effective for annual periods beginning on or after 1 July 2011 and are required to be applied retrospectively. The company is yet to perform a detailed assessment of the amended IFRS 7`s full impact. The company does not expect any impact. The company intends to adopt the amended IFRS 7 no later than the accounting period beginning on or after 1 July 2011. IFRS 7 `Financial Instruments: Disclosures` was amended in December 2011. The disclosures required were amended to include information that will enable users of an entity`s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity`s recognised financial assets and recognised financial liabilities, on the entity`s financial position. The amendments are effective for annual periods beginning on or after 1 January 2013 and are required to be applied retrospectively. The company is yet to perform a detailed assessment of the amended IFRS 7`s full impact. The company does not expect a significant impact. The company intends to adopt the amended IFRS 7 no later than the accounting period beginning on or after 1 January 2013. IFRS 9, `Financial instruments`, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity`s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity`s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The company is yet to perform a detailed assessment of IFRS 9`s full impact. The company does not expect a significant impact. The company intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 January 2015. IFRS 10, Consolidated financial statements` builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The company does not expect any impact. The company intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 January 2013. IFRS 12, `Disclosures of interests in other entities` includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The company is yet to perform a detailed assessment of IFRS 12`s full impact. The company does not expect a significant impact. The company intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 January 2013. IFRS 13, `Fair value measurement`, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The company is yet to perform a detailed assessment of IFRS 13`s full impact. The company does not expect a significant impact. The company intends to adopt IFRS 13 no later than the accounting period beginning on or after 1 January 2013. IAS 1 (amendments) Presentation of Items of Other Comprehensive Income revises the way other comprehensive income is presented by; preserving the amendments made to IAS 1 in 2007 to require profit or loss and other comprehensive income to be presented together or a separate `statement of profit or loss` and a `statement of comprehensive income`; requires entities to group items presented in other comprehensive income based on whether they are potentially re classifiable to profit or loss subsequently, i.e. those that might be reclassified and those that will not be reclassified; and requires the tax associated with items presented before tax to be shown separately for each of the two groups of other comprehensive income items (without changing the option to present items of other comprehensive income either before tax or net of tax). The amendments are effective for annual periods beginning on or after 1 July 2012 and are required to be applied retrospectively. The company is yet to perform a detailed assessment of the amended IAS 1`s full impact. The company does not expect any impact. The company intends to adopt the amended IAS 1 no later than the accounting period beginning on or after 1 July 2012. IAS 32 `Financial Instruments: Presentation` was amended in December 2011. The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32, the amendments clarify: * the meaning of `currently has a legally enforceable right of set-off`; and * that some gross settlement systems may be considered equivalent to net settlement. The amendments are effective for annual periods beginning on or after 1 January 2014 and are required to be applied retrospectively. The company is yet to perform a detailed assessment of the amended IAS 32`s full impact. The company does not expect any impact. The company intends to adopt the amended IAS 32 no later than the accounting period beginning on or after 1 January 2014. There are no other IFRS or IFRIC interpretations that have been issued but are not yet effective that would be applicable at year end. 2.6 Financial instruments Financial instruments are initially measured at fair value and are subsequently measured on the basis as set out below. Transaction costs of instruments carried at fair value through profit or loss are recognised immediately through the profit or loss component of the statement of comprehensive income. For other categories of financial instruments, transaction costs (which includes incremental costs) and transaction income (i.e. initiation fees) are capitalised to the initial carrying amount. Regular way purchases and sales of financial instruments are accounted for on trade date. Financial instruments are recognised on the date when the entity enters into contractual arrangements with counterparties to purchase or sell the financial instruments. The entity is required to group instruments into classes that are appropriate to the nature of the information disclosed and take into account the characteristics of those financial instruments. Classes of financial instruments have been determined by referring to the nature and extent of risks arising from the financial instruments and how these are managed. 2.6.1 Financial instruments at fair value through profit or loss Financial instruments are classified in this category if they meet one or more of the criteria set out below at initial recognition, and are so designated by management. The entity may only designate financial instruments at fair value through profit and loss when the designation results in more relevant information, as follows: * It eliminates or significantly reduces valuation or recognition inconsistencies that would arise from measuring financial assets or financial liabilities, or recognising gains or losses on them, on different bases. * When groups of financial assets, financial liabilities or combinations thereof are managed, and their performance evaluated, on a fair value basis in accordance with a documented risk management or investment strategy, and where information about the entity`s financial instruments is reported to management on that basis. The entity has documented risk management and investment strategies designed to manage such assets at fair value, taking into consideration the relationship of assets to liabilities in a way that mitigates market risks. * The entity can also designate at fair value through profit or loss if it relates to a contract containing one or more embedded derivatives that significantly modify the cash flows resulting from that contract. The fair value designation, once made, is irrevocable. Measurement is initially at fair value, with transaction costs taken directly to the profit and loss component of the statement of comprehensive income. Subsequent to initial recognition, the fair value is remeasured, and gains and losses from changes therein are recognised in profit or loss. Interest income from financial assets at fair value through profit or loss is recognised in profit or loss income, within interest. Dividend income from financial assets at fair value through profit or loss is recognised in profit or loss within dividend income when the entity`s right to receive payments is established. 2.6.2 Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, loans and receivables are subsequently measured at amortised cost using the effective interest rate method, less allowance for impairment. 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 the profit and loss component of the statement of comprehensive income . The carrying amount of impaired loans on the statement of financial position is reduced through the use of identified or unidentified impairment. Once a loan has been written down as a result of an impairment loss, interest income is thereafter recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. 2.6.3 Financial Liabilities Financial liabilities are measured at amortised cost, except for trading liabilities and liabilities designated at fair value, which are held at fair value through profit or loss. The fair value of a financial liability with a demand feature (e.g. a demand deposit) is not less than the amount payable on demand, discounted from the first date that the amount could be required to be paid. 2.6.4 Impairment of financial assets at amortised cost An impairment assessment of financial assets at amortised cost is performed at each reporting date. Amortised cost instruments are 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. An impairment loss in respect of an amortised cost investment is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the original effective interest rate. A financial asset or group of financial assets is considered impaired if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (known as the loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets and can be reliably measured. In determining whether a loss event has occurred, advances are subjected to regular evaluations that take cognisance of, inter alia, past experience of the economic climate similar to the current economic climate, overall customer risk profile and payment record and the realisable value of any collateral. Loans and receivables are stated net of identified and unidentified impairments. Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the attention of the entity and may include the following loss events: * Significant financial difficulty of the issuer or obligor; * A breach of contract, such as a default or delinquency in interest or principal payments; * The entity granting to the borrower, for economic or legal reasons relating to the borrower`s financial difficulty, a concession that the lender would not otherwise consider; * The disappearance of an active market for that financial asset because of financial difficulties; * Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group, including: - adverse changes in the payment status of borrowers in the group; or - national or local economic conditions that correlate with defaults on the assets in the group. The entity first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the entity determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses that group for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised, are not included in a collective assessment of impairment. The amount of impairment loss is measured as the difference between the asset`s carrying amount and the present value of estimated future cash flows (excluding future credit losses) discounted at the financial asset`s original effective interest rate. The carrying amount of the asset is reduced through the use of a provision account and the amount of the impairment loss is recognised in the profit and loss component of the statement of comprehensive income. If a loan receivable or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. The calculation of the present value of the estimated future cash flows of collateralised financial assets reflects the cash flows that may result from foreclosure, less costs of obtaining and selling the collateral, whether or not foreclosure is probable. For the purposes of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk characteristics (i.e. on the basis of the entity`s grading process that considers asset type, industry, geographical location, collateral type, past-due status and other relevant factors). These characteristics are relevant to the estimation of the cash flows for groups of such assets by being indicative of the debtors` ability to pay all amounts due according to the contractual terms of the assets being evaluated. Future cash flows for a group of financial assets that are collectively evaluated for impairment are estimated on the basis of the contractual cash flows of the assets in the group and historical loss experienced for assets with credit risk characteristics similar to those in the group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions and to remove the effects of conditions in the historical period that do not currently exist. Estimates of changes in future cash flows for groups of assets should reflect and be directionally consistent with changes in related observable data from period to period (i.e. changes in unemployment rates, property prices, payment status, or other factors indicative of changes in the probability of losses in the group and their magnitude). The methodology and assumptions used for estimating future cash flows are reviewed regularly by the entity to reduce any differences between loss estimates and actual loss experience. Loans or other receivables, together with the associated allowance, are written off when there are no realistic prospects of future recovery and all collateral has been realised or has been transferred to the entity. 2.6.5 De-recognition of financial assets A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when: * The contractual rights to the cash flows arising from the financial assets have expired or being forfeited by the entity; or * The entity retains the rights to receive cash flows form the asset but has assumed an obligation to pay for them in full without material delay to a third party under a pass-through arrangement; 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. Where the entity has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the entity`s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of the consideration that the entity could be required to repay. Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the entity`s continuing involvement is the amount of the transferred asset that the entity may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the entity`s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price. 2.6.6 De-recognition of financial liabilities 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. Where an existing financial liability is replaced by another from the same tender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de- recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit and loss component of the statement of comprehensive income. 2.6.7 Fair value Some of the entity`s financial instruments are carried at fair value through profit or loss such as those held for trading and those designated by management under the fair value option and non-cash flow hedging derivatives. The fair value of a financial instrument is the amount at which the instrument could 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: (a) Level 1 - 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 (b) Level 2 - 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. (c) Level 3 - Valuation techniques, as described in (b) above, for which not 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, although the value obtained from the relevant valuation model may differ. The difference between the transaction price and the model value, commonly referred to as `day one profit and loss`, 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, 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. 2.7 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 either to settle on a net basis, or realise the asset and settle the liability simultaneously. 2.8 Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity net of any tax effects. 2.9 Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Revenue comprises interest income and trust distributions. Interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective interest rate over the period to maturity, when it is probable that such income will be received by the company. The income earned by NewRand trust vests with Trackhedge Proprietary Limited. Trust distributions are the funds distributed from NewRand Trust to Trackhedge Proprietary Limited. 2.10 Cash and cash equivalents For the purposes of the statement of cash flows, cash comprises cash on hand and demand deposits. Cash equivalents comprise highly liquid investments that are convertible into cash with an insignificant risk of changes in value with original maturities of less than three months. 2.11 Taxation The taxation charge comprises current and deferred tax. Income tax expense is recognised in the profit and loss component of the statement of comprehensive income, except to the extent that it relates to items recognised directly in other comprehensive income, in which case it is recognised in other comprehensive income. 2.11.1 Current taxation The current tax liability or asset is the expected tax payable or recoverable, using tax rates and tax laws enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The taxation charge in the financial statements for amounts due to fiscal authorities in the various territories in which the entity operates, includes estimates based on a judgement of the application of law and practice in certain cases to determine the quantification of any liability arising. In arriving at such estimates, management assesses the relative merits and risks of the tax treatment for similar classes of transactions, taking into account statutory, judicial and regulatory guidance and, where appropriate, external advice. 2.11.2 Deferred tax Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases and carrying amounts of property, plant and equipment, certain financial assets and liabilities including derivative contracts, provisions for pensions and other post-retirement benefits and tax losses carried forward. 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. The rates enacted or substantially enacted at the reporting date are used to determine deferred income tax. 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 and loss. Deferred income tax is provided on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the difference will not reverse in the foreseeable future. Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the temporary differences can be utilised. The tax effects of income tax losses available for carry-forward are recognised as an asset when it is probable that future taxable profits will be available against which these losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority. 2.11.3 Secondary Tax on Companies The liability to pay dividends is only recognised once the dividends are declared. STC is provided for at 10,0% on the net of dividends declared less dividends received (unless exempt from STC) by the entity at the same time as the liability to pay the related dividends is recognised. STC credits that arise from dividends received and receivable that exceed dividends paid are accounted for as a deferred tax asset. STC is included in the `Taxation expense` line in the profit and loss component of the statement of comprehensive income. Dividend Withholding Tax(DWT) is a final tax, and is levied on the beneficial owner of the dividend in respect of all dividends paid by South African ("SA") companies as well as foreign companies listed on the JSE. 15% DWT is applicable unless an exemption applies or a reduced rate applies in terms of a Double Taxation Agreement ("DTA"). In the case of unlisted companies, the company is responsible to deduct and pay over the DWT to the SA Revenue Service ("SARS") on behalf of the beneficial owner. With regard to companies listed on the JSE, the DWT will be withheld and paid over to the SARS by the "regulated intermediary" on behalf of the beneficial owner. The beneficial owner of the dividend is, however, ultimately liable for the DWT and must pay over the tax to the SARS unless the tax has been paid by some other person. DWT is expected to have an impact on the entity, and will be effective from 1 April 2012. 2.12 Operating Segments The Index Securities issued by Trackhedge Proprietary Limited are listed on the JSE, thus Trackhedge Proprietary Limited falls within the scope of IFRS 8 : Operating Segments. Refer to note 16. 28 June 2012 Sponsor Absa Capital (the investment banking division of Absa Bank Limited,affiliated with Barclays) Date: 28/06/2012 17:21:52 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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