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Summarised audited results for the nine months ended 31 December 2012
NEWGOLD ISSUER LIMITED
Share code: GLD
ISIN: ZAE000060067
(“NewGold” or “the ETF”)
Preparer / Compiler : The financial statements were independently compiled by Ernst & Young Advisory Services
Proprietary Limited. Director : Cleedon Botha CA(SA)
Supervised by : These financial statements are under the direction and supervision of the Chief Financial officer of
Corporate and Investment Banking and Wealth ("CIBW"), Rolf Stromsoe CA(SA)
NEWGOLD ISSUER LIMITED
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2013
STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 MARCH 2013
2013 2012
R R
ASSETS
Current assets
Current tax receivable 25,660,931 6,193,051
Trade and other receivables 548,410 35,405
Gold Bullion 21,250,648,872 16,374,167,326
Cash and cash equivalents 15,623,753 7,472,483
Total assets 21,292,481,966 16,387,868,265
EQUITY AND LIABILITIES
Equity
Share capital 100 100
Retained income 6,422,369 3,966,698
Non-Current Liabilities
Deferred tax 40,109,249 12,693,075
Current liabilities
Debentures 21,243,416,640 16,368,599,389
Trade and other payables 2,533,608 2,609,003
Total Equity and Liabilities 21,292,481,966 16,387,868,265
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2013
2013 2012
R R
Revenue 78,030,590 69,988,858
Other income 177,517 36,495
Operating expenses (15,023,440) (24,631,696)
Fair value adjustment on Gold Bullion 2,623,647,841 4,765,495,021
Fair value adjustment on Debentures (2,623,647,841) (4,765,495,021)
Operating profit 63,184,667 45,393,657
Finance income 1,059,252 245,061
Profit before tax 64,243,919 45,638,718
Taxation (15,788,248) (15,679,209)
Profit for the year 48,455,671 29,959,509
Other comprehensive income - -
Total comprehensive income for the year 48,455,671 29,959,509
Total comprehensive income for the year
Owners of the Company 48,455,671 29,959,509
Earnings per share
Basic earnings per share (cents) 48,455,671 29,959,509
Diluted earnings per share (cents) 48,455,671 29,959,509
Headline earnings per share (cents) 48,455,671 29,959,509
Diluted headline earnings per share (cents) 48,455,671 29,959,509
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS FOR THE YEAR ENDED 31 MARCH 2013
Share Retained
Total equity
capital income
R R R
Balance at 1 April 2011 100 3,007,189 3,007,289
Changes in equity
Total comprehensive income for the year - 29,959,509 29,959,509
Dividends paid - (29,000,000) (29,000,000)
Total changes - 959,509 959,509
Balance at 01 April 2012 100 3,966,698 3,966,798
Changes in equity
Total comprehensive income for the year - 48,455,671 48,455,671
Dividends paid - (46,000,000) (46,000,000)
Total changes - 2,455,671 2,455,671
Balance at 31 March 2013 100 6,422,369 6,422,469
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2013
2013 2012
R R
Cash flows from operating activities
Cash generated from operations 61,380,184 45,361,963
Taxation paid (7,839,954) (9,137,333)
Interest received 611,040 247,493
Net cash from operating activities 54,151,270 36,472,123
Cash flows from investing activities
Sale of Gold Bullion 904,300,000 4,059,400,360
Purchase of Gold Bullion (3,233,500,000) (593,500,000)
Net cash from investing activities (2,329,200,000) 3,465,900,360
Cash flows from financing activities
Issue of debentures 3,233,500,000 593,500,000
Debentures redeemed (904,300,000) (4,059,400,000)
Dividends paid (46,000,000) (29,000,000)
Net cash flow financing activities 2,283,200,000 (3,494,900,000)
Total cash movement for the year 8,151,270 7,472,483
Cash at the beginning of the 7,472,483
Total cash at the end of the year 15,623,753 7,472,483
NOTES TO THE SUMMARISED FINANCIAL STATEMENTS FOR NEWGOLD ISSUER LIMITED FOR THE YEAR ENDED 31 MARCH 2013
Accounting policies
1. Presentation of the financial statements
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 periods presented,
unless otherwise stated. The presentation and disclosures of the summarised financial statements are in accordance with IAS 34.
1.1 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), and in the manner required by the Companies Act, 71 of 2008.
1.2 Basis of accounting and measurement
The financial statements have been prepared on an accrual basis of accounting. The measurement basis used is the historical cost basis, unless otherwise stated in the detailed
accounting policies below.
1.3 Functional and presentation currency
The financial statements are presented in South African Rand, which is the Scheme's functional and presentation currency. All financial information is presented to the nearest Rand.
1.4 Use of estimates, assumptions and judgements
The preparation of financial information requires the use of estimates and assumptions about future conditions. Use of available information and application of judgement are inherent
in the formation of estimates. Actual results in the future may differ from those current estimates reported. The accounting policies that are deemed critical to the Company’s results and
financial position, in terms of the materiality of the items to which the policy is applied, and which involve a high degree of judgement including the use of assumptions and estimation,
are included in the individual notes in the annual financial statements.
1.5 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 and loss component of the statement of comprehensive income. For other categories of financial instruments, transaction
costs (incremental costs directly attributable to the acquisition, issue or disposal of a financial instrument) and transaction income (i.e. initiation fees) are capitalised to the initial
carrying amount.
Financial instruments are recognised on the date when the Company enters into contractual arrangements with counterparties to purchase or sell the financial instruments.
The Company is required to group financial 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.
The Company generally adopts an approach of not reclassifying financial instruments between different categories subsequent to initial recognition. In exceptional circumstances,
where such reclassifications do occur, the Company will apply the requirements of the IAS 39 amendments for reclassifications together with the IFRS 7 required disclosures.
Financial instruments at fair value through profit or loss
Financial assets and financial liabilities classified in this category are those that have been designated by management upon initial recognition. Management may only designate an
instrument at fair value through profit or loss upon initial recognition when the following criteria are met:
• The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or recognising gains
or losses on them on a different basis.
• The assets and liabilities are managed and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment
strategy which significantly modify the cash flows that would otherwise be required by the contract.
Financial assets and financial liabilities at fair value through profit or loss are recorded in the statement of financial position at fair value. Changes in fair value are recorded in the profit
or loss section in the statement of comprehensive income. Included in this classification are debentures which are linked to Gold Bullion which is managed on a fair value basis.
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, such financial assets
are subsequently measured at amortised cost using the effective interest rate method, less impairment. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance income in the statement of
comprehensive income. The losses arising from impairments are recognised in profit or loss. Included in this classification are trade and other receivables and cash and cash
equivalents.
1.5.1 Financial liabilities
After initial recognition, loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit and loss
when the liabilities are derecognised as well as through the effective interest rate amortisation process. Amortised cost is calculated by taking into account any discount or premium on
acquisition and any fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs. Included in this classification
are trade and other payables.
The debentures are held at fair value and this fair value is referenced to the price of Gold Bullion.
1.5.2 Impairment of financial assets at amortised cost
The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of
financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an
incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future
cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually
significant, or collectively for financial assets that are not individually significant. If the Company 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 them 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. If there is
objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial
asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying
amount of the asset is reduced through the use of an allowance account and the loss is recognised in profit or loss. Interest income continues to be accrued on the reduced carrying
amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as finance
income.
Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the
Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the
previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write off is later recovered, the recovery is credited to finance costs.
1.5.3 Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or a part of a group of similar financial assets) is derecognised where:
• the rights to receive cash flows from the asset have been discharged, cancelled or have expired; or
• the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under
a pass through arrangement; or
• the Company has transferred its rights to receive cash flows from the asset and either:
- has transferred substantially all of the risks and rewards of the asset; or
- has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Where the Company 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 Company’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 Company 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 Company’s continuing involvement is the amount of the transferred asset that the Company 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 Company’s continuing
involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.
1.5.4 Derecognition of financial assets
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same
party on substantially different terms, or the terms of an existing liability are substantially modified (taking into account both quantitative and qualitative factors), such an exchange or
modification is treated as a derecognition 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.
Where the terms of an existing liability are not substantially modified, the liability is not derecognised. Costs incurred on such transactions are treated as an adjustment to the carrying
amount of the liability and are amortised over the remaining term of the modified liability.
1.5.5 Fair value
The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price
for long positions and ask price for short positions), without any deduction for transaction costs.
For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include, using recent arm’s length
market transactions, reference to the current fair value of another instrument that is substantially the same, u a discounted cash flow analysis or other valuation models. An analysis of
fair values of financial instruments and further details as to how they are measured are provided in note 20.
1.5.5 Offsetting
Financial instruments 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 has an intention to either settle on a net basis, or realise the asset and settle the liability simultaneously.
1.6 Share capital
Ordinary share capital
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity.
1.7 Revenue
Revenue is recognised at the fair value of consideration received or receivable to the extent that it is probable that the economic benefits will flow to the Company and the revenue can
be reliably measured. The following criteria are applicable to the following significant revenue categories:
Net interest income
Interest income and expense for all interest bearing financial instruments, except for those held at fair value through profit or loss, are recognised in ‘Net interest income’ in the
statement of comprehensive income using the effective interest rates of the financial assets or financial liabilities to which they relate.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount on initial recognition. When calculating the effective interest rate, the Company estimates the cash flows considering all
contractual terms of the financial instrument but does not consider future credit losses. 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 and includes the following:
• Origination fees relating to the creation or acquisition of a financial asset which may include compensation for activities such as evaluating the
borrower’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating the terms of the
instruments, preparing and processing documents and closing the transaction.
• Origination fees received on issuing financial liabilities measured at amortised cost.
• Commitment fees received by the Company to originate a loan and the commitment fee received are regarded as compensation for an ongoing involvement with the acquisition
of the financial instrument.
In calculating effective interest, the Company estimates cash flows using projections based on its experience of customer behaviour considering all contractual terms of the financial
instrument but excluding future credit losses. Where these estimates are revised, the carrying amount of the financial asset or liability is adjusted to reflect the change in estimated
cash flows. Cash flows arising from the transaction costs of issuing financial instruments are also taken into account in the calculation.
Interest is accrued in respect of the residual of impaired advances, based on the rate of interest used to discount the future cash flows for the purpose of measuring the impairment
loss.
Interest, including interest income from non derivative financial assets at fair value through profit and loss, is recognised by using the effective interest method.
Monthly gold sales charge
The monthly Gold sales charge consists of income earned from the sale of Gold Bullion which is permitted to be sold in order to cover the monthly expenses of the Company. The
monthly Gold sales charge equals the gross sale proceeds on the disposal of physical Gold Bullion.
Revenue from the gold sales is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when
the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be
1.8 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.
1.9 Tax
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 prior years.
The taxation charge in the financial statements for amounts due to fiscal authorities in the various territories in which the Company 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.
Deferred tax
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases and carrying amounts of property and equipment, certain financial
instruments including derivative contracts, provisions for pensions and other post retirement benefits and tax losses carried forward. In relation to acquisitions, deferred tax is raised on
the difference between the fair values of net assets acquired and their tax bases in the annual financial statements. 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.
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.
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 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.
Dividends Tax (DT) and Secondary Tax on Companies (STC)
DT, a new dividends withholding tax regime, became effective from 1 April 2012. Dividends are taxed at 15% in the hands of certain of the recipients of the dividends, rather than in the
hands of the declarer of the dividend. As such, for dividends declared and paid by the Company after 1 April 2012, the Company does not recognise tax on dividends declared in its
accounting records.
STC, which is applicable for financial years prior to 1 April 2012, was provided for at 10% on the net of dividends declared less dividends received (unless exempt from STC) by the
Company at the same time as the liability to pay the related dividends was recognised. STC credits that arose from dividends received and receivable that exceeded dividends paid
were accounted for as a deferred tax asset. STC was included in the ‘Taxation expense’ line in the profit and loss component of the statement of comprehensive income.
Value added tax (VAT)
Revenues, expenses and assets are recognised net of the amount of VAT, except:
• where the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognised as
part of the asset; and
• receivables and payables that are stated with the amount of VAT included.
1.10 Gold Bullion
Gold Bullion is a commodity that the Company buys and/or sells for others or on their own account. It is principally acquired with the purpose of selling in the near future and generating
a profit from fluctuations in price. The Gold Bullion (inventory) is therefore measured at fair value less costs to sell. The fair value of Gold Bullion is affected by the market and is
determined with reference to the exchange quoted selling price of gold per ounces known as Gold PM fix.
2. New standards and interpretations
2.1 Standards and interpretations effective and adopted in the current period
The application of the Company's accounting policies are consistent with those adopted in the prior year, except for those standards and amendments which became effective in the
current year. All other standards and amendments that became effective in the current year were assessed and have no impact on the annual financial statements:
IFRS 7 Amendments to IFRS 7 – Transfers of financial assets
This amendment is applicable to financial periods beginning on or after 1 July 2011. The amendment requires 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 entity’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.
This amendment did not impact the financial performance or position of the scheme but has resulted in additional disclosures being provided.
2.2 Standards and interpretations not yet effective and not adopted
A number of new standards, amendments to standards and interpretations issued are not yet effective for the current reporting period and have not been applied in preparing these
financial statements, only those standards, amendments and interpretations which were assessed to be applicable to the Schemes are disclosed below:
IFRS 9 Financial Instruments (IFRS 9)
This standard was initially published in November 2009 as the first step in replacing IAS 39 and contains new requirements for the classification and measurement requirements for
financial assets. The classification and measurement requirements of financial liabilities were added to IFRS 9 in October 2010. In July 2011, the International Accounting Standards
Board (IASB) communicated in an Exposure Draft its intention to postpone the mandatory application of IFRS 9 to periods beginning on or after 1 January 2015 with early application
still permitted.
In light of the impairment and hedging components of IFRS 9 not being finalised, a tentative decision was reached by the IASB on 7 November 2011 to change the effective date to
periods beginning on or after 1 January 2015. The IASB decided not to require the restatement of comparative financial statements for the initial application of the classification and
measurement requirement of IFRS 9, but instead to require modified disclosures on transition from the classification and measurement requirements of IAS 39 to those of IFRS 9.
The effective date of the standard is for years beginning on or after 01 January 2015.
The Company expects to adopt the standard for the first time in the 2016 annual financial statements.
The impact of the standard on the Company's annual financial statements is currently under assessment.
IFRS 13 Fair Value Measurement
This standard which is applicable to financial periods beginning on or after 1 January 2013, replaces guidance on fair value measurement in existing IFRS accounting standards by
providing a single source of guidance to prescribe how fair value should be measured. The standard requires (with some exceptions) entities to classify fair value measurements into a
‘fair value hierarchy’ based on the nature of the inputs. The standard also requires entities to make various disclosures depending on the nature and level of the fair value
measurement.
The impact of this standard is currently being assessed.
IAS 1 Presentation of Financial Statements
This amendment is applicable to financial periods beginning on or after 1 July 2012. The amendment revises the way other comprehensive income is presented by: preserving the
amendments made to IAS 1 in 2007 which require profit or loss and other comprehensive income to be presented together or as a separate ‘statement of profit or loss’ and ‘statement
of comprehensive income’; requiring entities to group items presented in other comprehensive income based on whether they are potentially reclassifiable to profit or loss or not; and
requiring 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 impact of this amendment is currently under assessment. The Company does however not expect it to have a material impact on the annual financial statements.
IAS 32 (amendments) (2011)
IAS 32 (amendments) (2011) Offsetting Financial Assets and Financial Liabilities, was issued in December 2011 and is effective for periods beginning on or after 1 January 2014. The
offsetting requirements in IAS 32 have been retained, such that a financial asset and a financial liability shall be offset and the net amount presented in the statement of financial
position when, and only when, an entity currently has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously. The amendment to IAS 32 provides more application guidance on when the criterion for offsetting would be considered to be met. The amended
standard is applicable to financial periods beginning on or after 1 January 2014. An entity shall apply the amendments retrospectively. Earlier application is permitted. If an entity
applies these amendments from an earlier date, it shall disclose that fact and shall also make the disclosures required by Disclosures – Offsetting Financial Assets and Financial
Liabilities (Amendments to IFRS 7) issued in December 2011.
This amendment is not expected to have a material impact on the Scheme's financial statements.
IFRS 7 (amendments) (2011)
IFRS 7 (amendments) (2011) Offsetting Financial Assets and Financial Liabilities, was issued in December 2011 and is effective for periods beginning on or after 1 January 2013. The
amendments require the disclosures 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. These disclosures are intended to
facilitate comparison between entities preparing IFRS financial statements and entities preparing financial statements under US GAAP. An entity shall apply these amendments for
periods beginning on or after 1 January 2013 and for interim periods within these periods. An entity shall provide the disclosures required by these amendments retrospectively.
The adoption of this amendment is not expected to impact on the results of the Scheme, but may result in more disclosure than is currently provided in the
financial statements.
Annual improvements project May 2012
The following improvements was issued in terms of the improvements project in May 2012. It is effective for periods beginning on or after 1 January 2013 and it is to be applied
retrospectively:
Amendments to IAS 1 Presentation of Financial Statements – When an entity provides comparative information that is in excess of the minimum requirements in the current period,
comparative information is required for all amounts reported, including narrative and descriptive information where this is relevant to understanding the current period financial
statements. Where an entity changes accounting policies, or makes retrospective restatements or reclassifications and such changes have a material effect on the statement of
financial position, an opening statement of financial position would be required as at the beginning of the required comparative period but related notes would not be required.
This amendment is not expected to have a material impact in the Company's annual financial statements.
2013 2012
3. Gold Bullion R R
Fair value of gold at the beginning of the year 16,374,167,326 15,144,169,033
Gold acquisitions 3,233,500,000 593,500,000
Gold redemptions (904,300,000) (4,059,400,360)
Proceeds on gold sales (76,366,296) (69,566,892)
Foreign exchange (loss) - (29,476)
Fair value adjustment for the year 2,623,647,842 4,765,495,021
21,250,648,872 16,374,167,326
4. Deferred tax
Deferred tax liability (40,109,249) (12,693,075)
Reconciliation of deferred tax liability
Opening balance (12,693,075) 86,100
Deferred tax realised ? audit fee provision (111,720) (86,100)
Fair value movements on Gold Bullion 734,621,396 1,334,338,606
Fair value movements on debentures (734,621,396) (1,334,338,606)
Deferred tax asset ? audit fee provision 84,588 111,720
Deferred tax asset on unutilised assessed losses - 530,679,693
Deferred tax liability on unrealised cost of sales ? Gold Bullion (151,262,015) (1,146,129,195)
Deferred tax asset on unrealised cost of sales ? debenture 141,003,359 602,644,707
Prior year under provision (17,130,386) -
(40,109,249) (12,693,075)
The prior year under provision relates to an overestimate of current taxation in the prior year (refer to note 6) and an under allocation of deferred tax expense in the prior year. The
deferred tax liability has therefore been adjusted to reflect the underestimate of deferred tax expense in the prior period.
5. Debentures
The unsecured debenture values are linked to the gold price and are listed on the Exchange Traded Index Funds sector of the Johannesburg Stock Exchange. The date of initial issue
of the debentures was 2 November 2004.
The debentures do not bear interest and rank pari passu among each other. The debenture holders have not acquired any ownership, right or beneficial interest in or to any Gold
Bullion held by the Company. The holder can redeem a debenture as long as the conditions for redemption as set out in the prospectus have been met. The Company can redeem
debentures in certain situations as set out in the prospectus.
Fair value movements on debentures
The carrying value of the liability at fair value and the amount which the Company is contractually required to pay the holder on redemption, approximate each other.
Fair value loss in the current year equals R 2,623,647,841 (2012: R 4,795,495,021) and the cumulative fair value movement is a loss of R13,364,404,730
(2012: R 10,740,756,889).
The changes in fair value of the liability attributable to changes in credit risk is Rnil (2012: Rnil). The constant credit spread approach was applied from the date the liabilities were
originated. No changes in the credit risk of the liabilities and the applicable credit spreads were observed after origin.
Reconciliation 2013 2013 2012 2012
Number of Number of debentures
debentures R R
Fair value at the beginning of the year 132,036,300 16,368,599,389 159,236,300 15,138,993,226
Creation of debentures 24,000,000 3,233,500,000 6,000,000 593,500,000
Redemption of debentures (6,800,000) (904,300,000) (33,200,000) (4,059,400,000)
Gold sales charge - (78,030,590) - (69,988,858)
Fair value adjustment - 2,623,647,841 - 4,765,495,021
149,236,300 21,243,416,640 132,036,300 16,368,599,389
The fair value is derived from multiplying the number of ounces with the PM fix (price of an ounce of gold) and also with the ZAR / USD exchange rate applicable
on 31 March 2013.
Quarterly review of the gold prices per ounce US $ R/$ R
30 June 2012 1,599 8.2063 13,122
30 September 2012 1,776 8.2872 14,718
31 December 2012 1,664 8.4703 14,095
31 March 2013 1,598 9.2115 14,720
Comparative review of the gold prices per ounce US $ R/$ R
30-Jun-11 1,506 6.7769 10,203
30-Sep-11 1,620 8.1018 13,125
31-Dec-11 1,531 8.1043 12,408
31-Mar-12 1,663 7.6815 12,770
Quarterly review of debenture values R
30 June 2012 132.00
30 September 2012 143.49
31 December 2012 137.45
31 March 2013 142.37
Comparative review of debentures values R
30-Jun-11 110.35
30-Sep-11 123.20
31-Dec-11 124.00
31-Mar-12 123.80
6. Taxation 2013 2012
R R
Major components of the tax expense
South African normal tax
Current year 7,702,509 -
Prior year over provision (19,330,435) -
(11,627,926) -
Secondary tax on companies - 2,900,000
Deferred tax
Current year 10,285,788 12,779,209
Prior year under provision 17,130,386 -
27,416,174 12,779,209
Total taxation 15,788,248 15,679,209
Reconciliation of the tax expense
Reconciliation between accounting profit and tax expense.
Operating profit before tax 64,243,919 45,638,718
Tax at the applicable tax rate of 28% (2012: 28%) 17,988,297 12,779,209
Tax effect of adjustments on taxable income
Prior year over provision ? current tax (19,330,435) -
Prior year under provision ? deferred tax 17,130,386 -
STC - 2,900,000
15,788,248 15,679,209
7. Dividends paid
Dividends (46,000,000) (29,000,000)
8. Related parties
Key management personnel:
? Maitland Group South Africa Limited
? NewGold Managers Proprietary Limited
? Absa Investment Management Services Proprietary Limited
Holding Company of NewGold Managers Proprietary Limited:
? NewGold Owner Trust
Holding company of Absa Investment Management Services Proprietary Limited:
? Absa Bank Limited
Ultimate holding company of Absa Investment Management Services Proprietary Limited:
? Barclays Bank Plc.
Related party balances
Absa Bank Limited
Payment made in advance - 9,975
Cash and cash equivalents 15,623,753 7,472,483
Sundry creditors 41,262 -
Barclays Bank Plc
Custodian fees payable - (1,743)
Maitland Group South Africa Limited
Fees payable (52,319) (11,836)
NewGold Managers Proprietary Limited
Sundry creditors - (56,314)
Sundry debtors 10,242 -
Absa Investment Management Services Proprietary Limited
Management fees (390) (1,095)
Related party transactions
NewGold Owner Trust
Dividends paid (46,000,000) (29,000,000)
NewGold Managers Proprietary Limited
Operating expenditure (24,817) (24,141)
Maitland Group South Africa Limited
Fees paid for directors' and trustees' services (142,040) (147,472)
Barclays Bank Plc
Custodian fees (8,925) (31,653)
Absa Investment Management Services Proprietary Limited
Management fees (11,394) (14,969)
Absa Bank Limited
Interest received 675,535 245,061
9. Events after the reporting period
No events, which are likely to have a material effect on the Company’s results in the current year, have occurred between the year end date and the date of this report except for a
dividend of R4,500,000 (2012: R3,200,000) that has been declared by the Company on 29 April 2013.
On the 26th April 2013 a new ETF, the NewGold Platinum Debentures ("NewPlat ETF") was listed on the Johannesburg Stock Exchange by the Company. The NewPlat ETF provides
investors with the opportunity to obtain exposure to the Rand performance of Platinum Bullion. The NewPlat ETF is fully backed by physical Platinum Bullion. Below are some NewPlat
ETF statistics as at 18 June 2013:
Market capitalisation: R6,015,360,000
Number of listed securities in issue: 41,600,000
Ounces of platinum held: 415,753 fine troy ounces.
The annual financial statements were approved by the directors on 27/06/2013 in the statement of directors' responsibility and approval.
Audit report
Ernst & Young,NewGold's independent auditor, has audited the annual financial statements of NewGold Issuer Limited 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 NewGold's
registered office.
The complete set of financial statements are available on Absa Capital’s website (www.absacapitaletfs.com).
Copies of the full announcement may be requested by emailing etf@absacapital.com
28 June 2013
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking division)
Date: 28/06/2013 04:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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