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SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
AFRICA ETF ISSUER (RF) LIMITED
(Registration number: 2013/022008/06)
SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
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
Share code: ETFRHO
ISIN: ZAE000210787
Preparer/Compiler The summarised annual financial statements
were independently compiled by:
Maitland Group South Africa Limited
Candice Snyders
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 2017
STATEMENT OF FINANCIAL POSITION
At 28 February 2017
Notes
2017 2016
R R
Assets
Cash and cash equivalents 40,613,719 24,995,786
Trade and other receivables 260,345 535,441
Bullion Investments 4 6,777,704,780 6,209,544,136
Current tax receivable 505,044 376,174
Deferred tax 3 192,312 165,907
Total Assets 6,819,276,200 6,235,617,444
EQUITY AND LIABILITIES
Equity
Share capital 120 120
Retained income 40,391,241 24,851,443
Total Equity 40,391,361 24,851,563
Liabilities
Trade and other payables 4,414,110 4,385,246
Debentures 5 6,774,470,729 6,206,380,635
Total Liabilities 6,778,884,839 6,210,765,881
Total Equity and Liabilities 6,819,276,200 6,235,617,444
-
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2017
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28 February 2017
Notes
2017 2016
R R
Management fee income 25,705,711 26,927,762
Other income 2,101,490 285,000
Operating expenses (7,582,710) (7,195,090)
Fair value adjustment on Bullion Investments 4 967,700,474 (669,854,126)
Fair value adjustment on Debentures 5 (968,479,735) 669,869,469
Operating profit 19,445,230 20,033,015
Finance income 2,164,506 973,178
Finance cost (8,644) (2,715)
Profit before taxation 21,601,092 21,003,478
Taxation 6 (6,061,294) (5,890,246)
Profit for the year 15,539,798 15,113,232
Profit for the year attributable to:
Owners of the company 15,539,798 15,113,232
Other comprehensive income - -
Total comprehensive income for the year 15,539,798 15,113,232
Total comprehensive income attributable to:
Owners of the Company 15,539,798 15,113,232
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2017
STATEMENT OF CHANGES IN EQUITY
For the year ended 28 February 2017
Retained
Share capital income Total equity
R R R
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
Changes in equity - - -
Total comprehensive income for the year - 15,539,798 15,539,798
Total changes - 15,539,798 15,539,798
Balances as at 28 February 2017 120 40,391,241 40,391,361
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
SUMMARISED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2017
STATEMENT OF CASH FLOWS
For the year ended 28 February 2017
2017 2016
Notes R R
Cash flows from operating activities
Cash generated from operations 19,678,640 21,840,385
Tax paid (6,216,569) (6,351,616)
Finance income 2,164,506 973,178
Finance expense (8,644) (2,715)
Net cash from operating activities 15,617,933 16,459,232
Cash flows from investing activities
Sale of Bullion 4 2,052,910,580 2,682,118,871
Purchase of Bullion 4 (1,681,825,448) (1,585,674,047)
Net cash from investing activities 371,085,132 1,096,444,824
Cash flows from financing activities
Creation of debentures 5 1,681,825,448 1,585,674,046
Debentures redeemed 5 (2,052,910,580) (2,682,118,871)
Net cash from financing activities (371,085,132) (1,096,444,825)
Net movement in cash and cash equivalents 15,617,933 16,459,231
Cash and cash equivalents at the beginning of the year 24,995,786 8,536,555
Cash and cash equivalents at the end of the year 40,613,719 24,995,786
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
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 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
In the preparation of the annual financial statements, management is required to make estimates and
assumptions that affect reported income, expenses, assets, liabilities and disclosure of contingent assets and
liabilities. Use of available information and the application of judgement is inherent in the formation of
estimates. Actual results in the future could differ from these estimates, which may be material to the financial
statements within the next financial year.
Judgements made by management that could have a significant effect on the amounts recognised in the
financial statements include:
- Estimated fair value of Bullion Investments
- Assessment to determine the Company's functional currency
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
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.
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 receivables 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 28 February 2017
1.5.1 Financial liabilities
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.
Classification of financial liabilities at fair value through profit or loss
The Company classifies the debenture liability at fair value through profit or loss if they are acquired
principally for the purpose of selling in the short term, i.e. are held for trading. They are presented as
current liabilities if they are expected to be sold within 12 months after the end of the reporting period;
otherwise they are presented as non-current liabilities. The Company has elected to designate any
financial liabilities at fair value through profit or loss.
Amounts recognised in profit or loss
Changes in fair values of financial liabilities at fair value through profit or loss are recorded in Fair value
adjustment on Debentures in profit or loss.
1.5.2 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
1.5.3 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, 0.25% 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.
1.8 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.
1.9 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 2017
1.10 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 2017
1.10 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 or expense; and
? receivables and payables that are stated with the amount of VAT included.
1.11 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 Bullion
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 28 February 2017
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
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 28 February 2017
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.
IAS 7 Statement of Cash Flows
Disclosure Initiative: Amendments requiring entities to disclose information about changes in their
financing liabilities. The additional disclosures will help investors to evaluate changes in liabilities arising
from financing activities, including changes from cash flows and non-cash changes (such as foreign
exchange gains or losses). 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.
IAS 12 Income Taxes
Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12): Narrow-scope
amendment to clarify the requirements on recognition of deferred tax assets for unrealised losses on debt
instruments measured at fair value. 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
2017 2016
R R
3. Deferred tax
Deferred tax asset
Deferred tax asset 192,312 165,907
Reconciliation of movement in deferred tax asset
Opening balance 165,907 168,686
Fair value movements on Bullion Investments (270,956,133) 187,559,155
Fair value movements on Debentures 271,174,326 (187,563,451)
Accruals (194,185) 72,023
Prepayments 2,397 (70,506)
192,312 165,907
Tax effects of temporary differences between tax and
book value for:
Fair value on Bullion Investments (207,970,865) 62,985,268
Fair value on Debentures 208,198,934 (62,975,392)
Accruals 32,352 226,537
Prepayments (68,109) (70,506)
192,312 165,907
4. Bullion Investments
Gold
Fair value at the beginning of the year 38,985,266 27,839,868
Gold purchases during the year 94,711,390 -
Proceeds on gold sales during the year (169,121) (79,804)
Fair value adjustment for the year (12,706,084) 11,225,202
120,821,451 38,985,266
As at 28 February 2017, 7,428.99 (2016: 1,987.01) ounces of gold bullion to the value of approximately
R120,772,649 (2016: R38,944,395) 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 28 February 2017
2017 2016
R R
4. Bullion Investments (continued)
Platinum
Fair value at the beginning of the year 1,710,375,670 1,501,132,057
Platinum purchases during the year 395,308,053 935,310,427
Platinum redemptions during the year (136,074,903) (894,231,496)
Proceeds on platinum sales during the year (5,863,596) (6,989,308)
Fair value adjustment for the year (182,181,970) 175,153,990
1,781,563,254 1,710,375,670
As at 28 February 2017, 133,664.79 (2016: 117,233,87) ounces of platinum bullion to the value of
approximately R1,780,832,407 (2016: R1,709,800,836) 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 22 for details
on the Security Trust.
Palladium
Fair value at the beginning of the year 4,452,249,398 6,567,000,350
Palladium purchases during the year 637,864,018 642,530,280
Palladium redemptions during the year (1,848,821,294) (1,787,887,375)
Proceeds on palladium sales during the year (19,484,037) (25,466,526)
Fair value adjustment for the year 1,090,803,572 (943,927,331)
4,312,611,657 4,452,249,398
As at 28 February 2017, 423,987.49 (2016: 567,581.30) ounces of palladium bullion to the value of
approximately R4,310,954,890 (2016: R4,449,712,542) 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 22 for details on the
Security Trust.
Rhodium
Fair value at the beginning of the year 7,933,802 -
Rhodium purchases during the year 553,941,987 7,833,340
Rhodium redemptions during the year (68,014,383) -
Proceeds on Rhodium sales during the year (2,937,944) -
Fair value adjustment for the year 71,784,956 100,462
562,708,418 7,933,802
As at 28 February 2017, 46,655.68 (2016: 748.45) ounces of rhodium bullion to the value of approximately
R561,962,440 (2016:7,922,862) 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 22 for details on the Security Trust.
Total Bullion Investments
Fair value at the beginning of the year 6,209,544,136 8,095,972,275
Total bullion purchases during the year 1,681,825,448 1,585,674,047
Total bullion redemptions during the year (2,052,910,580) (2,682,118,871)
Proceeds on Total bullion sales during the year (28,454,698) (32,535,638)
Fair value adjustment for the year 967,700,474 (757,447,677)
6,777,704,780 6,209,544,136
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
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 adjustment increasing debenture liability in the current year equals R968,479,735 (fair value
reduction in 2016: R669,869,469).
The changes in fair value of the liability attributable to changes in credit risk is Rnil (2016: 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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
5. Debentures (continued)
2017 2017 2016 2016
Number of Number of
debentures R debentures R
Reconciliation - Gold
Fair value at the beginning of the year 200,000 38,944,395 200,000 27,822,736
Creation of debentures 550,000 94,711,390 - -
Gold fee accrual (incl VAT) - (206,806) - (105,276)
Fair value adjustment - (12,727,969) - 11,226,935
Gold debentures 750,000 120,721,010 200,000 38,944,395
Reconciliation - Platinum
Fair value at the beginning of the year 11,800,000 1,709,800,836 11,100,000 1,500,234,532
Creation of debentures 2,700,000 395,308,053 7,300,000 935,310,427
Redemptions of debentures (1,000,000) (136,074,903) (6,600,000) (894,231,496)
Platinum fee accrual (incl VAT) - (6,264,092) - (6,426,918)
Fair value adjustment - (181,937,490) - 174,914,292
Platinum debentures 13,500,000 1,780,832,404 11,800,000 1,709,800,836
Reconciliation - Palladium
Fair value at the beginning of the year 57,200,000 4,449,712,542 70,800,000 6,562,622,492
Creation of debentures 7,400,000 637,864,018 7,300,000 642,530,280
Redemptions of debentures (21,700,000) (1,848,821,294) (20,900,000) (1,787,887,375)
Palladium fee accrual (incl VAT) - (19,308,066) - (24,154,761)
Fair value adjustment - 1,091,507,676 - (943,398,094)
Palladium debentures 42,900,000 4,310,954,876 57,200,000 4,449,712,542
Reconciliation - Rhodium
Fair value at the beginning of the year 75,000 7,922,862 - -
Creation of debentures 5,290,555 553,941,987 75,000 7,833,340
Redemptions of debentures (650,000) (68,014,383) - -
Rhodium fee accrual (incl VAT) - (3,525,545) - (10,695)
Fair value adjustment - 71,637,518 - 100,217
Rhodium debentures 4,715,555 561,962,439 75,000 7,922,862
Reconciliation - Total debentures
Fair value at the beginning of the year 6,206,380,635 8,090,679,760
Creation of debentures 1,681,825,448 1,585,674,047
Redemptions of debentures (2,052,910,580) (2,682,118,871)
Total fee accrual (incl VAT) (29,304,509) (30,697,650)
Fair value adjustment 968,479,735 (757,156,651)
Total debentures 6,774,470,729 6,206,380,635
For the gold, platinum and palladium debentures, the fair value is derived from multiplying the number of
ounces with the AM fix (price of an ounce of gold/ platinum and palladium), and also with the ZAR/USD
exchange rate taken around the same time on 28 February 2017. 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 28 February 2017.
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
5. Debentures (continued)
Quarterly review of the gold prices per ounce US$ R/$ R
31 May 2016 1,211 15.8221 19,153
31 August 2016 1,314 14.4293 18,967
30 November 2016 1,187 14.0157 16,642
28 February 2017 1,252 12.9858 16,257
Quarterly review of the gold debenture values per
debenture R
31 May 2016 190.18
31 August 2016 188.17
30 November 2016 164.98
28 February 2017 161.04
Quarterly review of the platinum prices per ounce US$ R/$ R
31 May 2016 993 15.8579 15,747
31 August 2016 1,076 14.4322 15,529
30 November 2016 923 13.9902 12,913
28 February 2017 1,026 12.9855 13,323
Quarterly review of the platinum debenture values per debenture R
31 May 2016 156.33
31 August 2016 154.03
30 November 2016 131.92
28 February 2017 131.92
Quarterly review of the palladium prices per ounce US$ R/$ R
31 May 2016 543 15.8579 8,611
31 August 2016 692 14.4322 9,987
30 November 2016 753 13.9902 10,535
28 February 2017 783 12.9855 10,168
Quarterly review of the palladium debenture values
per debenture R
31 May 2016 85.37
31 August 2016 98.92
30 November 2016 104.24
28 February 2017 100.51
Quarterly review of the rhodium prices per ounce US$ R/$ R
31 May 2016 670 15.8140 10,595
31 August 2016 675 14.4937 9,783
30 November 2016 740 13.9604 10,331
28 February 2017 925 13.0215 12,045
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
5. Debentures (continued)
Quarterly review of the rhodium debenture
values per debenture R
31 May 2016 105.51
31 August 2016 97.20
30 November 2016 102.40
28 February 2017 119.17
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 Stock Exchange
Palladium 42,900,000 Namibian Stock Exchange
Debentures are level 2 in nature, even though there is a quoted market price. The requirement for
frequently traded instrument is not met, due to the nature of the Debenture i.e. the value of the
debenture changes more frequently than the actual trading on the Debenture, as a result of the
changes in metal price.
.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
2017 2016
R R
6. Taxation
Major components of the tax expense
South African normal tax
Current year 6,087,699 5,887,467
Current taxation 6,087,699 5,887,467
Deferred tax
Current year (26,405) 2,779
Deferred taxation (26,405) 2,779
Total taxation 6,061,294 5,890,246
Reconciliation of the tax expense
Reconciliation between accounting profit and tax expense
Operating profit before tax 21,601,092 21,003,478
Tax at the applicable tax rate of 28% 6,048,306 5,880,974
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
SARS Interest and penalties 12,988 9,272
6,061,294 5,890,246
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 2017, 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 28 February 2017
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
2017
Assets
Bullion Investment 6,777,704,780 - - 6,777,704,780
Total assets 6,777,704,780 - - 6,777,704,780
Liabilities
Debentures - 6,774,470,729 - 6,774,470,729
Total liabilities - 6,774,470,729 - 6,774,470,729
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
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 28 February 2017
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.
2017 2016
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 40,613,599 24,995,666
Maitland Group South Africa Limited
Fees payable (653,926) (242,396)
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
2017 2016
R R
9. Related parties (continued)
Related party transactions
Maitland Group South Africa Limited
Fees for fund administration (1,796,411) (1,906,731)
Fees for corporate services (689,401) (290,958)
The Standard Bank of South Africa Limited
Interest paid (8,644) (2,715)
Interest Income 2,151,640 973,178
The Africa Funds Issuer Owner Trust owns 100% (2015: 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.
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.
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.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
10. Unconsolidated structured entities (continued)
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 28 February 2017
12. Presentation of statement of financial position in order of liquidity
The Company does not have a clearly identifiable operating cycle and therefore does not present current
and non-current assets and liabilities separately in the statement of financial position. Instead, assets
and liabilities are presented in order of their liquidity. The following table provides information on the
amounts expected to be recovered before and after 12 months after the reporting period.
28 February 2017
Amounts expected to be recovered or settled
Within 12 months after After 12 months after
the reporting period the reporting period Total
R R R
Assets
Cash and cash equivalents 40,613,719 - 40,613,719
Trade and other receivables 260,345 - 260,345
Bullion Investments 1 6,777,704,780 - 6,777,704,780
Current tax receivable 505,044 - 505,044
Deferred tax - 192,312 192,312
Total Assets 6,819,083,888 192,312 6,819,276,200
Liabilities
Trade and other payables 4,414,110 - 4,414,110
Debentures 6,774,470,729 - 6,774,470,729
Total Liabilities 6,778,884,839 - 6,778,884,839
29 February 2016
Amounts expected to be recovered or settled
Within 12 months after After 12 months after
the reporting period the reporting period Total
R R R
Assets
Cash and cash equivalents 24,995,786 - 24,995,786
Trade and other receivables 535,441 - 535,441
Bullion Investments 1 6,209,544,136 - 6,209,544,136
Current tax receivable 376,174 - 376,174
Deferred tax - 165,907 165,907
Total Assets 6,235,451,537 165,907 6,235,617,444
Liabilities
Trade and other payables 4,385,246 - 4,385,246
Debentures 6,206,380,635 - 6,206,380,635
Total Liabilities 6,210,765,881 - 6,210,765,881
1. The bullion investments are liquid in nature. These are classified as current as they back the debentures, which are
also current in nature.
AFRICA ETF ISSUER (RF) LIMITED
Registration number: 2013/022008/06
NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS
For the year ended 28 February 2017
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.
31/05/2017
Sponsor Standard Bank of South Africa Limited
Date: 31/05/2017 04:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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