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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 29 February 2016
Share code: ETFGLD
ISIN: ZAE000182523
Share code: ETFPLT
ISIN: ZAE000182556
Share code: ETFPLD
ISIN: ZAE000182531
Share code: ETFRHO
ISIN: ZAE000210787
Preparer/Compiler The summarised annual financial statements
were independently compiled by:
Maitland Group South Africa Limited
Limeez Kalam
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 29 FEBRUARY 2016
STATEMENT OF FINANCIAL POSITION
At 29 February 2016
Notes
2016 2015
R R
Assets
Non-Current Assets
Deferred tax 3 165,907 168,686
Current Assets
Trade and other receivables 535,441 69,311
Bullion Investments 4 6,209,544,136 8,095,972,275
Cash and cash equivalents 24,995,786 8,536,555
Current tax receivable 376,174 -
Total Assets 6,235,617,444 8,104,746,827
EQUITY AND LIABILITIES
Equity
Share capital 120 120
Retained income 24,851,443 9,738,211
Total Equity 24,851,563 9,738,331
Liabilities
Current Liabilities
Debentures 5 6,206,380,635 8,090,679,760
Trade and other payables 4,385,246 4,240,761
Current tax payable - 87,975
Total Liabilities 6,210,765,881 8,095,008,496
Total Equity and Liabilities 6,235,617,444 8,104,746,827
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 29 February 2016
Notes
2016 2015
R R
Management fee income 26,927,762 17,329,849
Other income 285,000 1,080,267
Operating expenses (7,195,090) (4,821,126)
Fair value adjustment on Bullion Investments (669,854,126) 444,906,742
Fair value adjustment on Debentures 669,869,469 (444,957,354)
Operating profit 20,033,015 13,538,378
Finance income 973,178 -
Finance cost (2,715) (2,446)
Profit before taxation 21,003,478 13,535,932
Taxation 6 (5,890,246) (3,790,061)
Profit for the year 15,113,232 9,745,871
Other comprehensive income - -
Total comprehensive income for the year 15,113,232 9,745,871
Total comprehensive income attributable to:
Owners of the Company 15,113,232 9,745,871
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016
STATEMENT OF CHANGES IN EQUITY
For the year ended 29 February 2016
Retained
Share capital income Total equity
R R R
Balances as at 1 March 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
Changes in equity - - -
Total comprehensive income for the year - 15,113,232 15,113,232
Total changes - 15,113,232 15,113,232
Balances as at 29 February 2016 120 24,851,443 24,851,563
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016
STATEMENT OF CASH FLOWS
For the year ended 29 February 2016
2016 2015
Note(s) R R
Cash flows from operating activities
Cash generated from operations 21,840,385 12,417,313
Tax paid (6,351,616) (3,870,772)
Finance Income 973,178 -
Finance expense (2,715) (2,446)
Net cash from operating activities 16,459,232 8,544,095
Cash flows from investing activities
Sale of Bullion 2,682,118,871 69,361,926
Purchase of Bullion (1,585,674,047) (7,734,891,799)
Net cash from investing activities 1,096,444,824 (7,665,529,873)
Cash flows from financing activities
Creation of debentures 1,585,674,046 7,734,891,799
Debentures redeemed (2,682,118,871) (69,361,926)
Net cash from financing activities (1,096,444,825) 7,665,529,873
Net movement in cash and cash equivalents 16,459,231 8,544,095
Cash and cash equivalents at the beginning of the year 8,536,555 (7,540)
Cash and cash equivalents at the end of the year 24,995,786 8,536,555
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
1. Presentation of the annual financial statements
The significant accounting policies applied in the preparation of these annual financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Statement of compliance
The audited annual financial statements have been prepared in accordance with the International Financial
Reporting Standards ("IFRS") and in the manner required by the Companies Act, 71 of 2008 and the JSE
Listings Requirements.
1.2 Basis of accounting and measurement
The annual financial statements have been prepared in accordance with going concern principles using 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.
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 29 February 2016
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.
Trade and other receivables
Trade and other recievables are initially recognised at fair value and subsequently measured at
amortised cost. Trade and other receivables are short term in nature and are not discounted.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
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.
After initial recognition the debentures are held at fair value and this fair value is referenced to the price of
Gold, Platinum, Palladium and Rhodium bullion respectively.
All redeemable securities provided by the portfolios provide investors with the right to request redemption
for cash or in specie at the value proportionate to each investor's share. The securities are redeemable at
any time at the option of the security holder and are therefore classified as financial liabilities. 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.
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 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 that can be reliably estimated.
Evidence of impairment may include indications that the 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 assesses whether objective evidence of
impairment exists individually for financial assets.
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 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 29 February 2016
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 ser of financial
statements.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
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 consists of a fee accrued daily on all the company's holdings of the relevant
commodity which that ETF references, calculated at the applicable rate set by the company, which is 0.30% per
annum (excluding VAT) for the Gold ETF, 0.30% per annum (excluding VAT) for the Platinum ETF, 0.35% per
annum (excluding VAT) for the Palladium ETF and 0.75% per annum (excluding VAT) for the Rhodium ETF.
Finance income
Finance income comprises of interest income on funds invested. Interest income is recognised as it accrued in
profit or loss, using the effective interest method.
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 29 February 2016
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 29 February 2016
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, Palladium and Rhodium Bullion
Gold, Platinum, Palladium and Rhodium Bullion are commodities that the Company buys and/or sells for
others or on their own account in order to generate a return of the respective Debenture and/or to realise fees.
The Company enables investors to track the performance of commodities through investing in the respective
debentures linked to Gold, Platinum, Palladium and Rhodium. 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 is initially measured at fair value and is 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 is 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/ rhodium per ounce known as Gold PM fix, Platinum PM fix,
Palladium PM fix and Rhodium PM fix.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
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.
There were no standards and amendments which became effective in the current year which are applicable to
the Company.
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.
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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
2. New Standards and Interpretations (continued)
2.2 Standards and interpretations not yet effective
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 2018. The amount is 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 29 February 2016
2016 2015
R R
3. Deferred tax
Deferred tax asset
Deferred tax asset 165,907 168,686
Reconciliation of movement in deferred tax asset
Opening balance 168,686 -
Fair value movements on Precious Metals 187,559,155 (124,573,888)
Fair value movements on Precious Metals debentures (187,563,451) 124,588,059
Accruals 72,023 154,515
Prepayments (70,506) -
165,907 168,686
Tax effects of temporary differences between tax and
book value for:
Fair value on Bullion Investment 62,985,268 (124,573,888)
Fair value on Debentures (62,975,392) 124,588,059
Accruals 226,537 154,515
Prepayments (70,506) -
165,907 168,686
4. Bullion Investments
Gold
Fair value at the beginning of the year 27,839,868 -
Gold purchases during the year - 53,202,778
Gold sales during the year - (26,588,660)
Proceeds on gold sales during the year (79,804) (78,168)
Fair value adjustment for the year 11,225,202 1,303,918
38,985,266 27,839,868
As at 29 February 2016, 1,987.01 ounces of gold bullion to the value of approximately R38,944,395
(2015: R27,823,937) 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 22 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 29 February 2016
2016 2015
R R
4. Bullion Investments (continued)
Platinum
Fair value at the beginning of the year 1,501,132,057 -
Platinum purchases during the year 935,310,427 1,564,861,542
Platinum sales during the year (894,231,496) -
Proceeds on platinum sales during the year (6,989,308) (1,358,210)
Fair value adjustment for the year 175,153,990 (62,371,275)
1,710,375,670 1,501,132,057
As at 29 February 2016, 117,233,87 ounces of platinum bullion to the value of approximately
R1,709,800,836 (2015: R1,500,234,528) 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 6,567,000,350 -
Palladium purchases during the year 642,530,280 6,116,827,479
Palladium sales during the year (1,787,887,375) (42,773,266)
Proceeds on palladium sales during the year (25,466,526) (13,027,961)
Fair value adjustment for the year (943,927,331) 505,974,098
4,452,249,398 6,567,000,350
As at 29 February 2016, 567,581.30 ounces of palladium bullion to the value of approximately
R4,449,712,542 (2015: R6,562,622,520) 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.
Rhodium
Fair value at the beginning of the year - -
Rhodium purchases during the year 7,833,340 -
Fair value adjustment for the year 100,462 -
7,933,802 -
As at 29 February 2016, 748.45 ounces of rhodium bullion to the value of approximately R7,922,862
(2015:nil) has been pledged in favour of AfricaRhodium Security Trust as security for the guarantee
provided by AfricaRhodium Security Trust against Africa ETF Issuer’s obligations under the
AfricaRhodium Debentures. The balance of the rhodium 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 6,209,544,136 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 29 February 2016
5. Debentures
The unsecured debenture values are linked to the respective gold, platinum, palladium and rhodium
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 4 December 2015 for Rhodium, 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, Palladium or
Rhodium 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. Based on certain contingent events the
Company has the option to settle the debentures; these events are not expected to occur in the normal
course of business. The debenture holder has the option to put the debenture back to the Company.
Details of the redemption process are 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 R669,869,469 (fair value loss in 2015: R444,957,354).
The changes in fair value of the liability attributable to changes in credit risk is Rnil (2015: 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.
2016 2016 2015 2015
Number of Number of
debentures R debentures R
Reconciliation - Gold
Fair value at the beginning of the year 200,000 27,822,736 - -
Creation of debentures - - 400,000 53,202,778
Redemptions of debentures - - (200,000) (26,588,660)
Gold fee accrual (incl VAT) - (105,276) - (91,108)
Fair value adjustment - 11,226,935 - 1,299,726
Gold debentures 200,000 38,944,395 200,000 27,822,736
Reconciliation - Platinum
Fair value at the beginning of the year 11,100,000 1,500,234,532 - -
Creation of debentures 7,300,000 935,310,427 11,100,000 1,564,861,542
Redemptions of debentures (6,600,000) (894,231,496) - -
Platinum fee accrual (incl VAT) - (6,426,918) - (2,152,614)
Fair value adjustment - 174,914,292 - (62,474,396)
Platinum debentures 11,800,000 1,709,800,836 11,100,000 1,500,234,532
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
5. Debentures (continued)
Fair value movements on debentures (continued)
Reconciliation - Palladium
Fair value at the beginning of the year 70,800,000 6,562,622,492 - -
Creation of debentures 7,300,000 642,530,280 71,300,000 6,116,827,479
Redemptions of debentures (20,900,000) (1,787,887,375) (500,000) (42,773,266)
Palladium fee accrual (incl VAT) - (24,154,761) - (17,563,745)
Fair value adjustment - (943,398,094) - 506,132,024
Palladium debentures 57,200,000 4,449,712,542 70,800,000 6,562,622,492
Reconciliation - Rhodium
Fair value at the beginning of the year - - - -
Creation of debentures 75,000 7,833,340 - -
Redemptions of debentures - - - -
Rhodium fee accrual (incl VAT) - (10,695) - -
Fair value adjustment - 100,217 - -
Rhodium debentures 75,000 7,922,862 - -
6,206,380,635 8,090,679,760
For the gold, platinum and palladium debentures, the fair value is derived from multiplying the number of
ounces with the PM fix (price of an ounce of gold/ platinum and palladium), and also with the ZAR/USD
exchange rate taken around the same time on 29 February 2016. For the rhodium debentures, the fair
value is derived from a price received from an independent data provider and the same ZAR/USD as per
the gold, platinum and palladium ETFs. This is different from the Fund’s published NAVs in order to
account for currency and price movements on 29 February 2016.
Quarterly review of the gold prices per ounce US$ R/$ R
31 May 2015 1,190 12.1483 14,461
31 August 2015 1,126 13.3626 15,040
30 November 2015 1,056 14.3803 15,181
29 February 2016 1,234 16.0514 19,810
Quarterly review of the gold debenture values per
debenture R
31 May 2015 144.06
31 August 2015 149.69
30 November 2015 150.96
29 February 2016 196.88
Quarterly review of the platinum prices per ounce US$ R/$ R
31 May 2015 1,114 12.1530 13,538
31 August 2015 999 13.3489 13,336
30 November 2015 848 14.3576 12,175
29 February 2016 920 16.1005 14,812
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
5. Debentures (continued)
Quarterly review of the platinum debenture values per debenture R
31 May 2015 134.86
31 August 2015 132.72
30 November 2015 121.06
29 February 2016 147.49
Quarterly review of the palladium prices per ounce US$ R/$ R
31 May 2015 781 12.1530 9,491
31 August 2015 563 13.3489 7,515
30 November 2015 555 14.3576 7,968
29 February 2016 491 16.1005 7,905
Quarterly review of the palladium debenture values
per debenture R
31 May 2015 94.47
31 August 2015 74.72
30 November 2015 79.15
29 February 2016 77.49
Quarterly review of the rhodium prices per ounce US$ R/$ R
31 May 2015 - - -
31 August 2015 - - -
30 November 2015 - - -
29 February 2016 670 16.0609 10,761
Quarterly review of the rhodium debenture values per
debenture R
31 May 2015 -
31 August 2015 -
30 November 2015 -
29 February 2016 107.39
Africa ETF Issuer (RF) Limited debentures are primary listed on the Johannesburg Stock Exchange
and secondary listed on the following exchange. The details are given below:
Precious Metals debentures Number of listed debentures Stock Exchange
Palladium 57,200,000 Namibian Stock Exchange
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
2016 2015
R R
6. Taxation
Major components of the tax expense
South African normal tax
Current year 5,887,467 3,958,747
Current taxation 5,887,467 3,958,747
Deferred tax
Current year 2,779 (168,686)
Deferred taxation 2,779 (168,686)
Total taxation 5,890,246 3,790,061
Reconciliation of the tax expense
Reconciliation between accounting profit and tax expense
Operating profit/(loss) before tax 21,003,478 13,535,932
Tax at the applicable tax rate of 28% 5,880,974 3,790,061
Non-deductible differences 9,272 -
5,890,246 3,790,061
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 29 February 2016, 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.
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
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
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
2016
Assets
Bullion Investment 6,209,544,136 - - 6,209,544,136
Total assets 6,209,544,136 - - 6,209,544,136
Liabilities
Debentures - 6,206,380,635 - 6,206,380,635
Total liabilities - 6,206,380,635 - 6,206,380,635
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
2015
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.
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
8. Fair value hierarchy (continued)
Level 1
Financial instruments valued 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.
Level 2
Financial instruments valued using inputs other than quoted prices as described above for Level 1
including:
• 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.
2016 2015
R R
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 24,995,666 8,536,435
Maitland Group South Africa Limited
Fees payable (242,396) (594,879)
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
2016 2015
R R
R
9. Related parties (continued)
Related party transactions
Maitland Group South Africa Limited
Fees for fund administration (1,906,731) (1,400,129)
Fees for corporate services (290,958) (313,500)
The Standard Bank of South Africa Limited
Interest paid (2,715) (2,446)
Interest Income 973,178 -
The Africa Funds Issuer Owner Trust owns 100% (2015: 100%) of the ordinary shares in the entity.
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 AfricaRhodium Security Trust is a special purpose trust established in terms of the AfricaRhodium
Security Trust Deed for the purposes of issuing a Guarantee in favour of the AfricaRhodium
Debenture Holders and the creditors in respect of the Rhodium ETF. As at the date of this Prospectus,
the trustee of the AfricaRhodium Security Trust is 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 29 February 2016
10. Unconsolidated structured entities (continued)
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. The AfricaRhodium Security Trust
has issued a guarantee in favour of the AfricaRhodium Debenture Holders and other creditors in respect
of the Rhodium 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.
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 the date in the statement of directors'
responsibility.
The annual financial statements cannot be amended after issue.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 29 February 2016
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.
31/05/2016
Sponsor Standard Bank of South Africa Limited
Date: 31/05/2016 05:39:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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