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GLD
GLD - NewGold Issuer Limited - Audited summarised financial statements for the
year ended 31 March 2011
NewGold Issuer Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2004/014119/06)
Share code: GLD
ISIN code: ZAE000060067
("NewGold")
AUDITED SUMMARISED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011
Statement of financial position as at 31 March 2011
2011 2010
ASSETS R R
Non-current asset
Deferred tax asset 86 100 292 023
Current assets 15 173 732 586 12 959 368 924
Cash and cash equivalents - 192 186
Gold bullion 15 144 169 033 12 949 929 492
Trade and other receivables 29 563 553 9 247 246
TOTAL ASSETS 15 173 818 686 12 959 660 947
EQUITY AND LIABILITIES
Share capital and reserves 3 007 289 5 229 493
Ordinary share capital 100 100
Retained earnings 3 007 189 5 229 393
Non-current liabilities
Debentures 15 138 993 226 12 945 494 003
Current liabilities 31 818 171 8 937 451
Trade and other payables 31 773 923 8 699 812
Current tax payable 44 248 237 639
TOTAL EQUITY AND LIABILITIES 15 173 818 686 12 959 660 947
Statement of comprehensive income for the year ended 31 March 2011
2011 2010
R R
Revenue 56 606 103 46 032 132
Gold sales charge 59 368 707 45 795 312
Finance income 237 396 236 820
Other income - 86 663
Other expenses (22 600 221) (17 545 084)
Finance charges - (633)
Fair value adjustments on gold (2 463 987 930) 56 466 123
bullion
Fair value adjustments on 2 463 987 930 (56 466 118)
debentures designated at fair
value through profit or loss
Profit before taxation 37 005 882 28 573 083
Income tax expense (13 139 853) (9 523 679)
Profit for the year 23 866 029 19 049 404
Other comprehensive income
Other comprehensive income for the - -
year, net of tax
Total comprehensive income for the 23 866 029 19 049 404
year
Attributable to:
Shareholders per 238 660 190 494
share
Statement of changes in equity for the year ended 31 March 2011
Share Retained Total
Capital Earnings
R R R
Balance at 1 April 2009 100 1 370 843 1 370 943
Total comprehensive income for
the year - 19 049 404 19 049 404
Dividends declared and paid -
(15 190 854) (15 190 854)
Balance at 31 March 2010
100 5 229 393 5 229 493
Total comprehensive income for
the year - 23 866 029 23 866 0289
Dividends declared and paid
- (26 088 233) (26 088 233)
Balance at 31 March 2011
100 3 007 189 3 007 289
Statement of cash flows for the year ended 31 March 2011
2011 2010
R R
Net cash inflow/(outflow)from 548 130 (374 073)
operating activities
Cash generated from operations 39 526 288 27 089 833
Interest received 237 396 236 820
Dividends paid (26 088 233) (15 190 854)
Taxation paid (13 127 321) (12 509 872)
Net cash inflow/(outflow) from 211 120 000 (4 769 180 400)
investing activities
Proceeds from the sale of gold 2 610 680 000 1 863 040 000
bullion
Purchase of gold bullion (2 399 560 000) (6 632 220 400)
Net cash inflow/(outflow) from (211 860 316) 4 767 501 662
financing activities
Proceeds from debenture issue 2 399 560 000 6 632 220 400
Debentures redeemed (2 610 680 000) (1 863 040 000)
Unsold gold bullion (740 316) (1 678 738)
Net (decrease) in cash and cash (192 186) (2 052 812)
equivalents
Cash and cash equivalents at 192 186 2 244 998
the beginning of year
Cash and cash equivalents at - 192 186
end of year
NOTES
1 Accounting policies
The financial information incorporate the principal accounting policies set
out below which have been applied consistently for all periods presented by
NewGold Issuer Limited. The functional and presentation currency is the
South African Rand (ZAR). Figures are rounded to the nearest cent.
1.1 Statement of compliance
The financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB), the AC500 series as issued by the Accounting
Practice Board, IAS 34 Interim Financial Reporting and in the manner
required by the Companies Act of South Africa.
1.2 Basis of measurement
The financial statements have been prepared using the accrual basis, except
for the statement of cash flows and where specifically indicated otherwise
in the accounting policies.
1.3 Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables,
cash and cash equivalents, trade and other payables, and debentures.
Initial recognition and measurement
Non-derivative financial instruments are recognised initially at fair value
plus any directly attributable transaction costs. Directly attributable
transaction costs are only included in the initial carrying amount of
financial instruments that are not designated at fair value through profit
and loss. Regular way purchases and sales of financial instruments are
accounted for on trade date. All other financial instruments are
recognised when the entity first becomes a party to the contractual
provisions of the instrument. Subsequent measurement of non-derivative
financial instruments is described below.
Classification and subsequent measurement
The classification of financial instruments at initial recognition depends
on the purpose for which the financial instruments were acquired and their
characteristics.
Cash and cash equivalents comprise cash balances and call deposits with an
original maturity of three months or less and are measured at amortised
cost.
Trade and other receivables are measured at amortised cost using the
effective interest method, less any impairment losses. The amortisation is
included in profit or loss.
The effective interest method is a method of calculating the amortised cost
of a financial instrument and of allocating the interest income or interest
expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments or receipts
throughout the expected life of the financial instrument, or, when
appropriate, a shorter period, to the net carrying amount of the financial
instrument.
Debentures are designated as at fair value through profit or loss, as this
results in more relevant information because it significantly reduces a
measurement or recognition inconsistency and is managed on a fair value
basis. The fair value designation, once made, is irrevocable. Measurement
is initially at fair value, with directly attributable transaction costs
taken directly to profit or loss.
Subsequently, the liability is remeasured to fair value, and gains and
losses from changes therein are recognised in profit or loss.
The fair value of the liability is the amount which NewGold Issuer Limited
is contractually required to pay to the holder of the debenture on demand.
This is determined by reference to the exchange quoted selling prices of
NewGold debentures. The exchange quoted selling prices of NewGold
debentures is affected by the market value of the underlying asset being
gold bullion.
The fair value is derived from multiplying the number of ounces with the PM
fix and also with the ZAR/USD exchange rate applicable on 31 March 2011.
Trade and other payables are initially measured at fair value, with
directly attributable transaction costs being capitalised to the initial
carrying amount.
Trade and other payables are subsequently measured at amortised cost using
the effective interest method. The amortisation is included in profit or
loss.
Other non-derivative financial instruments are measured at amortised cost
using effective interest method, less any impairment loss.
1.4 Derecognition of financial instruments
The company derecognises a financial asset when and only when:
The contractual rights to the cash flows arising from the financial assets
have expired or been forfeited by the company; or
It transfers the financial asset including substantially all the risks and
rewards of ownership of the assets; or
It transfers the financial asset, neither retaining nor transferring
substantially all the risks and rewards of ownership of the asset, but no
longer retains control of the asset.
A financial liability is derecognised when and only when the liability is
extinguished, that is, when the obligation specified in the contract is
discharged, cancelled or has expired.
The difference between the carrying amount of a financial liability (or
part thereof) extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
On derecognition of financial asset in its entirety, the difference between
the carrying amount and the sum of the consideration received (including
new asset obtained less any new liability assumed) is recognised in profit
or loss.
1.5 Impairments
A financial asset not carried at fair value through profit or loss is
assessed at each reporting date to determine whether there is any objective
evidence that it is impaired. A financial asset is considered to be
impaired if objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that asset.
Objective evidence that a financial asset is impaired includes observable
data that comes to the attention of the company and may include the
following loss event:
The disappearance of an active market for that financial asset because of
financial difficulties.
An impairment loss in respect of a financial asset measured at amortised
cost is calculated as the difference between the asset`s carrying amount,
and the present value of estimated future cash flows discounted at the
financial asset`s original effective interest rate.
All impairment losses are recognised in profit or loss.
An impairment loss is reversed if the reversal can be related objectively
to an event occurring after the impairment loss was recognised.
1.6 Inventory
Inventory is comprised of gold bullion. Inventory is carried at fair value
less cost to sell. The fair value is affected by the market value of gold
bullion and this is determined with reference to the exchange quoted
selling prices of gold per ounces known as Gold PM fix.
1.7 Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares are recognised as a deduction
from equity net of any tax effects.
1.8 Revenue
Revenue comprises income from:
Monthly gold sales charge
The income earned from the sale of gold bullion. The ounces sold amount to
0.40 % p.a. of the gold bullion held by NewGold. This is the gross sales
proceeds on disposal of physical gold bullion.
Revenue from the gold sales is measured at the fair value of the
consideration received or receivable, net of returns, trade discounts and
volume rebates. Revenue is recognised when the significant risks and
rewards of ownership have been transferred to the buyer, recovery of the
consideration is probable, the associated costs and possible return of
goods can be estimated reliably, there is no continuing management
involvement with the goods, and the amount of revenue can be measured
reliably.
Finance income
Interest, including interest income from non-derivative financial assets at
fair value through profit or loss, is recognised by using the effective
interest method.
1.9 Expenses recognition
Expenses are recognised in profit or loss income when decrease in future
economic benefits related to a decrease in an asset or an increase in a
liability has arisen that can be measured reliably.
Management and administration expenses are recognised in profit or loss as
incurred.
1.10 Taxation
Income tax on the profit or loss for the period comprises current and
deferred tax. Income tax is recognised in profit or loss except to the
extent that it relates to items recognised directly in other comprehensive
income or recognised directly in equity, in which case it is recognised in
other comprehensive income or equity.
Current tax is the expected tax payable on the taxable income for the
period, using tax rates enacted or substantively enacted at the balance
sheet date, and any adjustment to tax payable in respect of previous
periods.
Deferred taxation is provided using the balance sheet method based on
temporary differences. Temporary differences are differences between the
carrying amount of assets and liabilities for financial reporting purposes
and their tax base. The amount of deferred taxation provided is based on
the expected manner of realisation or settlement of the carrying amount of
assets and liabilities using tax rates enacted or substantively enacted at
the reporting date. Deferred taxation is charged to profit or loss except
to the extent that it relates to a transaction that is recognised directly
in other comprehensive income or recognised directly in equity, or a
business combination that is an acquisition. The effect on deferred
taxation of any changes in tax rates is recognised in profit or loss,
except to the extent that it relates to items previously charged or
credited to other comprehensive income or recognised directly in equity.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable
entity.
Deferred tax is not recognised for temporary differences arising on the
initial recognition of assets or liabilities in a transaction that is not a
business combination as it affects neither accounting nor taxable profit
nor loss.
A deferred tax asset is recognised to the extent that it is probable that
the future taxable income will be available, against which the unutilised
tax losses and deductible temporary differences can be used. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefits will be
realised.
1.11 Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical
judgements in applying the accounting policies that have the most
significant effect on the amounts recognised in the financial statements is
included in note 10 - Taxation.
1.12 Provisions
Provisions are recognised when the company has a present legal or
constructive obligation as a result of past events, for which it is
probable that an outflow of economic benefits will occur, and where a
reliable estimate can be made of the amount of the obligation. Where the
effect of discounting is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where appropriate, the
risks specific to the liability.
Future operating costs or losses are not provided for.
1.13 Dividends
Dividends are payable at 100% of distributable profits provided that the
company will be liquid and solvent after the distribution. Dividends
payable to holders of the equity instruments of the company are recognised
in the period in which they are declared.
1.14 Foreign currency translation and balances
Transactions in foreign currencies are translated to the respective
functional currency of NewGold Issuer Limited at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies at the reporting date are retranslated to the functional
currency at the exchange rate at that date. The foreign currency gain or
loss on monetary items is the difference between amortised cost in the
functional currency at the beginning of the period, adjusted for effective
interest and payments during the period, and the amortised cost in foreign
currency translated at the exchange rate at the end of the period.
Non-monetary assets and liabilities denominated in foreign currencies that
are measured at fair value are retranslated to the functional currency at
the exchange rate at the date that the fair value was determined. Foreign
currency differences arising on retranslation are recognised in profit or
loss, in the fair value adjustment line.
1.15 Offsetting
Financial assets and liabilities are offset and the net amount reported in
the statement of financial position when the entity holds a current legally
enforceable right to set off the recognised amounts and intends to either
settle on a net basis, or realise the asset and settle the liability
simultaneously.
1.16 New standards and interpretations not adopted yet
There are a number of new or revised standards, amendments to standards and
interpretations issued but not yet effective for the year ended 31 March
2011 which have not been applied in preparing these financial statements.
These include the following standards and interpretations that are
applicable to the business of the entity and may have an impact on future
financial statements.
IFRS 9 Financial Instruments
IFRS 9 retains but simplifies the mixed measurement model and establishes two
primary measurement categories for financial assets: amortised cost and fair
value. The basis of classification depends on the entity`s business model and
contractual cash flow characteristics of the financial asset. The guidance in
IAS 39 on Impairment of financial assets and hedge accounting continues to
apply. Amendments are effective for the annual periods beginning on or after 1
January 2013. The Amendment might affect the measurement and disclosure of
financial instruments in the financial statements.
1.17 Operating Segments
NewGold Issuer Limited offers only one product being the NewGold debentures
which tracks the gold price. The information regarding the results of the
reportable segment is disclosed in the financial statements as currently
set out, thus no further IFRS 8 Operating segments disclosures is required.
Audit report
KPMG Inc, NewGold Issuer Limited`s independent auditor, has audited the annual
financial statements of NewGold Issuer Limited from which the summarised results
contained in this announcement have been derived, and has expressed an
unmodified opinion on the annual financial statements.
The audit report is available for inspection at the registered office of NewGold
Issuer Limited
The complete set of financial statements are available on Absa Capital`s website
(www.absacapitaletfs.com).
Date 29 June 2011
Sponsor:
J.P. Morgan Equities Limited
Date: 29/06/2011 17:13:02 Produced by the JSE SENS Department.
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