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Summarised Annual Financial Statements
AFRICA ETF ISSUER (RF) LIMITED
(Registration number: 2013/022008/06)
SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
Share code: ETFGLD
ISIN: ZAE000182523
Share code: ETFPLT
ISIN: ZAE000182556
Share code: ETFPLD
ISIN: ZAE000182531
Preparer/Compiler The summarised annual financial statements were independently compiled
by:
Maitland Group South Africa Limited
Cecilia Strydom CA (SA)
Supervised Africa ETF Issuer (RF) Limited is managed by The Standard Bank of
South Africa Limited ("Standard Bank"). All References to manager and
management relate to The Standard Bank of South Africa Limited. These
summarised annual financial statements are under the direction and
supervision of Standard Bank.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015
STATEMENT OF FINANCIAL POSITION
At 28 February 2015
Notes
2015 2014
R R
Assets
Non-Current Assets
Deferred tax 3 168,686 -
Current Assets
Trade and other receivables 69,311 -
Bullion Investments 4 8,095,972,275 -
Cash and cash equivalents 8,536,555 120
Total Assets 8,104,746,827 120
EQUITY AND LIABILITIES
Equity
Share capital 120 120
Retained income 9,738,211 (7,660)
Total Equity 9,738,331 (7,540)
Liabilities
Current Liabilities
Debentures 5 8,090,679,760 -
Trade and other payables 4,240,761 -
Current tax payable 87,975 -
Bank overdraft - 7,660
Total Liabilities 8,095,008,496 7,660
Total Equity and Liabilities 8,104,746,827 120
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28 February 2015
Notes
2015 2014
R R
Management fee income 17,329,849 -
Other income 1,080,267 -
Operating expenses (4,821,126) (7,362)
Fair value adjustment on Bullion Investments 444,906,742 -
Fair value adjustment on Debentures (444,957,354) -
Operating profit/(loss) 13,538,378 (7,362)
Finance cost (2,446) (298)
Profit/(loss) before taxation 13,535,932 (7,660)
Taxation 6 (3,790,061) -
Profit/(loss) for the year/period 9,745,871 (7,660)
Other comprehensive income - -
Total comprehensive income/(loss) for the year/period 9,745,871 (7,660)
Total comprehensive income (loss) attributable to:
Owners of the Company 9,745,871 (7,660)
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015
STATEMENT OF CHANGES IN EQUITY
For the year ended 28 February 2015
Retained
Share capital income Total equity
R R R
Balances as at 11 February 2013 - - -
Changes in equity - - -
Issue shares 120 - 120
Total comprehensive loss for the period - (7,660) (7,660)
Total changes 120 (7,660) (7,540)
Balances as at 28 February 2014 120 (7,660) (7,540)
Changes in equity - - -
Total comprehensive income for the year - 9,745,871 9,745,871
Total changes - 9,745,871 9,745,871
Balances as at 28 February 2015 120 9,738,211 9,738,331
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015
STATEMENT OF CASH FLOWS
For the year ended 28 February 2015
2015 2014
Note(s) R R
Cash flows from operating activities
Cash generated from operations 12,417,313 (7,362)
Tax paid (3,870,772) -
Finance expense (2,446) (298)
Net cash from operating activities 8,544,095 (7,660)
Cash flows from investing activities
Sale of Bullion 69,361,926 -
Purchase of Bullion (7,734,891,799) -
Net cash from investing activities (7,665,529,873) -
Cash flows from financing activities
Issue of debentures 7,734,891,799 -
Debentures redeemed (69,361,926) -
Proceeds from the issue of shares - 120
Net cash from financing activities 7,665,529,873 120
Net movement in cash and cash equivalents 8,544,095 (7,540)
Cash and cash equivalents at the beginning of the year/period (7,540) -
Cash and cash equivalents at the end of the year/period 8,536,555 (7,540)
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
1. Presentation of the annual financial statements
The significant accounting policies applied in the preparation of these summarised annual financial statements
are set out below. These policies have been consistently applied to all the years presented, unless otherwise
stated. The presentation and disclosure of the summarised financial statements are in accordance with IAS
34.
1.1 Statement of compliance
The summarised annual 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 and JSE
Listings Requirements.
1.2 Basis of accounting and measurement
The annual 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 annual financial statements are presented in South African Rand, which is the Company’s functional
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.
Management have not made use of significant estimates, assumptions or judgements in preparing these
financial statements.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
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 designated 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
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.
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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
1.5.2 Impairment of financial assets at amortised cost (continued)
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.
1.5.4 Derecognition of financial liabilities
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, 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, 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 18 in the complete set of financial
statements.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
1.5.6 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 off-set the recognised amounts and has an intention to either
settle on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the company or the counterparty.
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:
Management fee income
The management fee income consist of a fee accrued daily on all the company's bullion holdings in excess of
1,000 fine troy ounces of the relevant commodity which that ETF references, calculated at the applicable rate
set by the company, which will initially be 0.3% per annum (excluding VAT) for the Gold ETF and Platinum
ETF and 0.35% per annum (excluding VAT) for the Palladium ETF.
Other income
The sales consists of income earned from the sale of Gold, Platinum or Palladium Bullion which is permitted to
be sold in order to cover the expenses of the Company. The sales equals the gross sale proceeds on the
disposal of physical Gold, Platinum or Palladium Bullion.
Revenue from the precious metals 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 estimated reliably, there is no continuing
management involvement with the goods, and the amount of revenue can be measured reliably.
1.8 Cash and cash equivalents
For the purposes of the statement of cash flows, cash comprises of 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
1.9 Tax
Current 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 annual 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 balance sheet 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-retirements 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.
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 against 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
extend 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
1.9 Tax (Continued)
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, Platinum and Palladium Bullion
Gold, Platinum and Palladium Bullion are commodities that the Company buys and/or sells for others or on
their own account. The Company enables investors to track the performance of commodities through
investing in the respective debentures linked to Gold, Platinum or Palladium. There is an active market for the
respective commodities with trading prices publically available. The most appropriate policy is to hold these
Bullions as an investment held at fair value through profit and loss.
Bullion are initially measured at fair value and are subsequently measured on the basis as set out below.
Transaction costs of Bullion carried at fair value through profit or loss are recognised immediately through the
profit and loss component of the statement of comprehensive income.
Bullion are recognised on the date when the Company enters into contractual arrangements with
counterparties to purchase Bullion.
It is subsequently measured at fair value and recorded on the statement of financial position. Changes in fair
value are recorded in the profit and loss section in the statement of comprehensive income.
The fair value of Bullion is affected by the market and is determined with reference to the exchange quoted
selling price of gold/platinum/palladium per ounce known as Gold AM fix, Platinum AM fix and Palladium AM
fix.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
2. New Standards and Interpretations
2.1 Standards and interpretations effective and adopted in the current year
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:
IAS 32 Financial Instruments: Presentation (amendments) (2011)
IAS 32 (amendments) (2011) Offsetting Financial Assets and Financial Liabilities , was issued in December
2011 and was effective for annual 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 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. An entity shall apply the amendments
retrospectively.
This amendment had no material impact on the Company's annual financial statements.
2.2 Standards and interpretations not yet effective
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 annual financial statements. Only those
standards, amendments and interpretations which were assessed to be applicable to the Company are
disclosed below:
IFRS 9 Financial Instruments
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 annual periods beginning no earlier than 1 January 2017 with early
application of certain paragraphs permitted. 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
2. New Standards and Interpretations (continued)
2.2 Standards and interpretations not yet effective
IFRS 9 as issued reflects the first phase of the IASB’s work on the replacement of IAS 39 and applies to
classification and measurement of financial assets and financial liabilities as defined in IAS 39. The
standard was initially effective for annual periods beginning on or after 1 January 2013 but Amendments
to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures issued in December 2011
moved the mandatory effective date to 1 January 2015. In November 2013 issued IFRS 9 Financial
Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) amending IFRS 9 to
include the new general hedge accounting model, allow adoption of the treatment of fair value changes
due to own credit on liabilities designated at fair value through profit or loss to be recognised through
other comprehensive income, and remove the 1 January 2015 effective date.
During July 2014 the IASB issued IFRS 9 as a complete standard including the requirements previously
issued and the additional amendments to introduce a new expected loss impairment model and limited
changes to the classification and measurement requirements for financial assets.
This amendment completes the IASB's financial instruments project and the standard is effective for
reporting periods on or after 1 January 2018 with early adoption permitted (subject to local endorsement
requirements). The amount is not expected to have a material impact on the Company's annual financial
statements.
IFRS 15 Revenue from Contracts with Customers
The core principle of the new Standard is for companies to recognise revenue to depict the transfer of
goods or services to customers in amounts that reflect the consideration (that is, payment) to which the
company expects to be entitled in exchange for those goods or services. IFRS 15 establishes a five-step
model that will apply to revenue earned from a contract with a customer regardless of the type of revenue
transaction or industry. The standard’s requirements will also apply to the recognition of some gains and
losses of some non-financial assets that are not an output of the entity’s ordinary activities.
The new standard will also result in enhanced disclosures about revenue, provide guidance for
transactions that were not previously addressed comprehensively (for example, service revenue and
contract modifications). The standard also improves guidance for multiple-element arrangements.
Extensive disclosures will be required including the disaggregation of total revenue, information about
performance obligations, changes in contract asset and liability account balances between periods and
key judgements and estimates. The standard is effective for annual periods beginning on or after 1
January 2017. The amount is not expected to have a material impact on the Company's annual financial
statements.
Amendments from Annual Improvement Projects
Amendments resulting from Annual Improvements 2011-2013 cycle
In December 2013, the IASB issued Annual Improvements to IFRSs 2011-2013 Cycle, a collection of
amendments to IFRSs. The amendments are effective for annual periods beginning on or after 1 July
2014, although entities are permitted to adopt them earlier.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
2.2 Standards and interpretations not yet effective (continued)
Amendments resulting from Annual Improvements 2011-2013 cycle (continued)
IFRS 13 Fair Value Measurement: Amendments to scope of the portfolio exception - The objective of this
amendment is to clarify that the portfolio exception applies to all contracts within the scope of IAS 39
Financial Instruments: Recognition and Measurement of IFRS 9 Financial Instruments, regardless of
whether they meet the definitions of financial assets or financial liabilities as defined in IAS 32 Financial
Instruments: Presentation. The amendment requires prospective adoption.
This amendment is not expected to have a material impact on the Company's annual financial
statements.
Amendments resulting from Annual Improvements 2010-2012 cycle
In December 2013, the IASB issued Annual Improvements to IFRSs 2010-2012 Cycle, a collection of
amendments to IFRSs. With limited exception, the amendments are effective for annual periods
beginning on or after 1 July 2014, although entities are permitted to adopt them earlier.
IFRS 13 Fair Value Measurement: Short-term receivables and payables - The IASB clarified that short
term receivables and payables with no stated interest rates can be held at invoice amounts when the
effect of discounting is immaterial. The amendment is effective as from the date of publication.
IAS 24 Related Party Disclosures: Amendment regarding management entities - The amendment clarifies
that a management entity, which is defined as an entity provides key management personnel services,
may be a related party subject to the related party disclosures. In addition, an entity that uses a
management entity is required to disclose the expenses incurred for management services. The
amendments are required to be applied retrospectively.
These amendments are not expected to have a material impact on the Company's annual financial
statements.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
2015 2014
R R
3. Deferred tax
Deferred tax asset
Deferred tax asset 168,686 -
Reconciliation of deferred tax asset
Opening balance - -
Fair value movements on Precious Metals (124,573,888) -
Fair value movements on Precious Metals debentures 124,588,059 -
Accruals 154,515 -
168,686 -
Tax effects of temporary differences between tax and
book value for:
Fair value on Bullion Investment (124,573,888) -
Fair value on Debentures 124,588,059 -
Accruals 154,515 -
168,686 -
4. Bullion Investments
Gold
Fair value at the beginning of the year - -
Gold acquisitions during the year 53,202,778 -
Gold redemptions during the year (26,588,660) -
Proceeds on gold sales during the year (78,168) -
Fair value adjustment for the year 1,303,918 -
27,839,868 -
As at 28 February 2015, 1993.85 ounces of gold bullion to the value of approximately R27,823,938
(2014: nil) has been pledged in favour of AfricaGold Security Trust as security for the guarantee
provided by AfricaGold Security Trust against Africa ETF Issuer's obligations under the AfricaGold
debentures. The balance of the gold bullion holdings which have not been pledged are for Africa ETF
Issuer's own account. Refer to note 10 for details on the Security Trust.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
2015 2014
R R
4. Bullion Investments (continued)
Platinum
Fair value at the beginning of the year - -
Platinum acquisitions during the year 1,564,861,542 -
Proceeds on platinum sales during the year (1,358,210) -
Fair value adjustment for the year (62,371,275) -
1,501,132,057 -
As at 28 February 2015, 110 658.80 ounces of platinum bullion (ETFs) to the value of approximately
R1,500,234,528 (2014: nil) has been pledged in favour of AfricaPlatinum Security Trust as security for
the guarantee provided by AfricaPlatinum Security Trust against the Africa ETF Issuer’s obligations
under the AfricaPlatinum Debentures. The balance of the platinum bullion holdings which have not
been pledged are for Africa ETF Issuer’s own account. Refer to note 10 for details on the Security
Trust.
Palladium
Fair value at the beginning of the year - -
Palladium acquisitions during the year 6,116,827,479 -
Palladium redemptions during the year (42,773,266) -
Proceeds on palladium sales during the year (13,027,961) -
Fair value adjustment for the year 505,974,098 -
6,567,000,350 -
As at 28 February 2015, 705 352.76 ounces of palladium bullion to the value of approximately
R6,562,622,520 (2014:nil) has been pledged in favour of AfricaPalladium Security Trust as security for
the guarantee provided by AfricaPalladium Security Trust against Africa ETF Issuer’s obligations under
the AfricaPalladium Debentures. The balance of the palladium bullion holdings which have not been
pledged are for Africa ETF Issuer’s own account. Refer to note 10 for details on the Security Trust.
Total Bullion Investments 8,095,972,275 -
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
5. Debentures
The unsecured debenture values are linked to the respective gold, platinum and palladium prices and are
listed on the Exchange Traded Index Funds sector of the Johannesburg Stock Exchange. The date of
initial issue of the debentures was 24 March 2014 for Palladium and 7 April 2014 for Platinum and Gold.
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, Platinum or Palladium 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 gain in the current year equals R 444,957,354 (2014: nil) and the cumulative fair value
movement is a gain of R 444,957,354.
The changes in fair value of the liability attributable to changes in credit risk is Rnil (2014: 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.
2015 2015 2014 2014
Number of Number of
debentures R debentures R
Reconciliation - Gold
Fair value at the beginning of the year - - - -
Creation of debentures 400,000 53,202,778 - -
Redemptions of debentures (200,000) (26,588,660) - -
Gold fee accrual (incl VAT) - (91,108) - -
Fair value adjustment - 1,299,726 - -
Gold debentures 200,000 27,822,736 - -
Reconciliation - Platinum
Fair value at the beginning of the year - - - -
Creation of debentures 11,100,000 1,564,861,542 - -
Platinum fee accrual (incl VAT) - (2,152,614) - -
Fair value adjustment - (62,474,396) - -
Platinum debentures 11,100,000 1,500,234,532 - -
Reconciliation - Palladium
Fair value at the beginning of the year - - - -
Creation of debentures 71,300,000 6,116,827,479 - -
Redemptions of debentures (500,000) (42,773,266) - -
Palladium fee accrual (incl VAT) - (17,563,745) - -
Fair value adjustment - 506,132,024 - -
Palladium debentures 70,800,000 6,562,622,492 - -
8,090,679,760 -
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
5. Debentures (continued)
The fair value is derived from multiplying the number of ounces with the AM fix (price of an ounce of
gold/ platinum/ palladium) and also with the ZAR/USD exchange rate applicable on 28 February 2015.
Quarterly review of the gold prices per ounce US$ R/$ R
31 May 2014 1,254 10.4403 13,092
31 August 2014 1,286 10.6091 13,641
30 November 2014 1,185 11.0020 13,032
28 February 2015 1,205 11.5803 13,954
Quarterly review of the gold debenture values per
debenture R
31 May 2014 130.81
31 August 2014 136.21
30 November 2014 130.02
28 February 2015 139.04
Quarterly review of the platinum prices per ounce US$ R/$ R
31 May 2014 1,457 10.4440 15,217
31 August 2014 1,425 10.6026 15,109
30 November 2014 1,214 11.0395 13,402
28 February 2015 1,173 11.5578 13,557
Quarterly review of the platinum debenture values
per debenture R
31 May 2014 152.09
31 August 2014 150.88
30 November 2014 133.71
28 February 2015 135.20
Quarterly review of the palladium prices per ounce US$ R/$ R
31 May 2014 831 10.4440 8,679
31 August 2014 897 10.6026 9,511
30 November 2014 804 11.0395 8,876
28 February 2015 805 11.5578 9,304
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
5. Debentures (continued)
Quarterly review of the palladium debenture values
per debenture R
31 May 2014 86.73
31 August 2014 94.95
30 November 2014 88.52
28 February 2015 92.68
Africa ETF Issuer (RF) Limited debentures are primary listed the Johannesburg Stock Exchange and
secondary listed on the following exchange. The details are given below:
Precious Metals debentures Number of listed Stock Exchange
Palladium 70,800,000 Namibian Stock Exchange
6. Taxation
Major components of the tax expense
South African normal tax
Current year 3,958,747 -
Current taxation 3,958,747 -
Deferred tax
Current year (168,686) -
Deferred taxation (168,686) -
Total taxation 3,790,061 -
Reconciliation of the tax expense
Reconciliation between accounting profit and tax expense
Operating profit/(loss) before tax 13,535,932 (7,660)
Tax at the applicable tax rate of 28% 3,790,061 -
3,790,061 -
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
7. Fair value of financial instruments
Financial instruments at amortised cost carried on the statement of financial position include cash and cash
equivalents, trade and other receivables, and trade and other payables. As at 28 February 2014, for all these
instruments, the carrying amounts approximate the fair values of the respective assets and liabilities because
the instruments are short term in nature, therefore no further hierarchy disclosure were made for these
instruments.
8. Fair value hierarchy
The table below shows the Company's assets and liabilities that are recognised and subsequently measured
at fair value and are analysed by valuation techniques. The classification of assets and liabilities is based on
the lowest level input that is significant to the fair value measurement in its entirety. A description of the
nature of the techniques used to calculate valuations based on observable inputs and valuations based on
unobservable inputs is set out in the table below:
Recurring fair value measurements
2015 Valuations Valuations Valuations
with reference based on based on
to observable observable un-
prices inputs observable
inputs
Level 1 Level 2 Level 3 Total
R R R R
Assets
Bullion Investment 8,095,972,275 - - 8,095,972,275
Total assets 8,095,972,275 - - 8,095,972,275
- - - -
Liabilities - -
Debentures - 8,090,679,760 - 8,090,679,760
Total liabilities - 8,090,679,760 - 8,090,679,760
Note that a level 1 fair value was not used for debentures as we applied a bid-ask adjustment to the level 1
fair value.
No comparative figures presented as no transactions occurred for investments and debentures in the
previous financial period.
Level 1
Financial instruments values with reference to unadjusted quoted prices for identical assets or liabilities 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.
An active market is one in which transactions occur with sufficient volume and frequency to provide pricing
information on an ongoing basis.
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
2015 2014
R R
8. Fair value hierarchy (continued)
Level 2
Financial instruments valued using inputs other than quoted prices as described above for Level 1 but
• quoted price for similar assets or liabilities in an active market;
• quoted price for identical or similar assets or liabilities in inactive markets;
• valuation model using observable inputs; and
• valuation model using inputs derived from/corroborated by observable market data.
The valuation technique applied in order to value the Level 2 financial instrument is with reference to the
value of the underlying bullion investments after deducting the current sales. The bullion investments and
the sales values are calculated with reference to the Rand value of the underlying precious metal.
Level 3
Financial instruments valued using inputs that are not based on observable market data (unobservable
data) such as an entity's own assumptions about assumptions of market participants in pricing the asset or
liability.
9. Related parties
Key management personnel:
• Maitland Group South Africa Limited
• The Standard Bank of South Africa Limited
Holding Company
• Africa Funds Issuer Owner Trust
Related party balances
The Standard Bank of South Africa Limited
Cash and cash equivalents 8,536,435 (7,590)
Maitland Group South Africa Limited
Fees payable (594,879) -
Related party transactions
Maitland Group South Africa Limited
Fees for fund administration (1,400,129) -
The Standard Bank of South Africa Limited
Interest paid (2,446) (298)
The Africa Funds Issuer Owner Trust owns 100% (2014: 100%) of the ordinary shares in the entity. The
founder of the Africa Funds Issuer Owner Trust is The Standard Bank of South Africa Limited. The
Trustees of Africa Funds Issuer Owner Trust are Maitland Group South Africa Limited.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
10. Unconsolidated structured entities
The Africa ETF Issuer's obligations under the Debentures are not secured by any of the assets of the
Africa ETF Issuer (including any Commodity held by the Africa ETF Issuer from time to time), but the
payment obligations of the Africa ETF Issuer under the Debentures are secured by the relevant Security
Trust binding itself under a Guarantee issued in favour of the Debenture Holders in respect of the
relevant Class of Debentures as guarantor, guaranteeing the Africa ETF Issuer's obligations under the
relevant Debentures.
The AfricaPlatinum Security Trust is a special purpose trust established in terms of the AfricaPlatinum
Security Trust Deed for the purposes of issuing a Guarantee in favour of the AfricaPlatinum Debenture
Holders and the creditors in respect of the Platinum ETF. As at the date of this Prospectus, the trustee of
the AfricaPlatinum Security Trust is Maitland Group South Africa Limited.
The AfricaPalladium Security Trust is a special purpose trust established in terms of the AfricaPalladium
Security Trust Deed for the purposes of issuing a Guarantee in favour of the AfricaPalladium Debenture
Holders and the creditors in respect of the Palladium ETF. As at the date of this Prospectus, the trustee
of the AfricaPalladium Security Trust is Maitland Group South Africa Limited.
The AfricaGold Security Trust is a special purpose trust established in terms of the AfricaGold Security
Trust Deed for the purposes of issuing a Guarantee in favour of the AfricaGold Debenture Holders and
the creditors in respect of the Gold ETF. As at the date of this Prospectus, the trustee of the AfricaGold
Security Trust is Maitland Group South Africa Limited.
The AfricaPlatinum Security Trust has issued a Guarantee in favour of the AfricaPlatinum Debenture
Holders and other creditors in respect of the Platinum ETF. The AfricaPalladium Security Trust has
issued a Guarantee in favour of the AfricaPalladium Debenture Holders and other creditors in respect of
the Palladium ETF. The AfricaGold Security Trust has issued a guarantee in favour of the AfricaGold
Debenture Holders and other creditors in respect of the Gold ETF.
In terms of each Guarantee, the liability of the relevant Security Trust is limited to the amount recovered
under the Indemnity granted in its favour and the Security granted in respect thereof in terms of the
relevant Security Agreement. In relation to each Class of Debentures the interests of the creditors will be
represented by the corresponding Security Trust. In terms of the applicable Debenture Conditions the
relevant Security Trust is required to enforce the Security granted to it on behalf of the creditors and
issue an Enforcement Notice to the Africa ETF Issuer if called upon to do so by an Extraordinary
Resolution of the Debenture Holders under that Class of Debentures. Creditors will not be able to
enforce the Security themselves nor to take any action against the Africa ETF Issuer in respect of the
Security or otherwise, nor to enforce claims against the Africa ETF Issuer except through the relevant
Security Trust unless the Guarantee structure is not enforceable or the relevant Security Trust is
sequestrated or fails to act within a reasonable time of being called upon to do so.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2015
10. Unconsolidated structured entities (continued)
If the Security Trust is sequestrated, creditors shall be entitled to take action themselves to enforce
claims directly against the Africa ETF Issuer by delivering an Enforcement Notice in respect of a
Debenture but, in such circumstances, the applicable Security held by the Security Trust will be
bypassed and thus no longer be effective as a means of achieving distribution of the Africa ETF Issuer's
assets which relate to that Debenture in accordance with the relevant Priority of Payments.
11. 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.
The annual financial statements were approved by the directors on 29 May 2015.
The annual financial statements cannot be amended after issue.
Audit report
This summarised report is extracted from audited information, but is not itself audited.
PricewaterhouseCoopers Inc, Africa ETF's independent auditor, has audited the annual financial
statements of Africa ETF Issuer (RF) 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 Africa ETF's registered office.
The complete set of financial statements are available on www.standardbank.co.za.
Copies of the full announcement may be requested by emailing africaetf@standardbank.co.za .
Directors' responsibility
The summarised annual financial statements are extracted from audited information, but are not itself
audited.
The directors take full responsibility for the preparation of the summarised annual financial statements
and the financial information has been extracted correctly from the underlying audited financial
statements.
24/06/2015
Sponsor Standard Bank of South Africa Limited
Date: 24/06/2015 03:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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