| Thu 28 Jun 2012, 17:22 | | GLD - NewGold Issuer Limited - Summarised audited results for the year ended 31 |
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GLD
GLD - NewGold Issuer Limited - Summarised audited results for the year ended 31
March 2012
NewGold Issuer Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2004/014119/06)
Share code: GLD
ISIN code: ZAE000060067
("NewGold")
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2012
STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2012
2012 2011
ASSETS R R
Non-current asset
Deferred tax asset - 86 100
Current assets 16 387 868 265 15 173 732 586
Cash and cash 7 472 483 -
equivalents
Gold bullion 16 374 167 326 15 144 169 033
Trade and other 35 405 29 563 553
receivables
Current Tax receivable 6 193 051 -
16 387 868 265 15 173 818 686
Total assets
EQUITY AND LIABILITIES
Equity 3 966 798 3 007 289
Ordinary share capital 100 100
Retained earnings 3 966 698 3 007 189
Non-current liabilities 12 693 075
Deferred tax liability 12 693 075 -
Current liabilities 16 371 208 392 15 170 811 397
Debentures 16 368 599 389 15 138 993 226
Trade and other payables 2 609 003 31 773 923
Current tax payable - 44 248
Total equity and 16 387 868 265 15 173 818 686
liabilities
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2012
2012 2011
R R
Revenue 70 233 919 59 606 103
Gold sales charge 69 988 858 59 368 707
Finance income 245 061 237 396
Other income 36 495 -
Operating expenses (24 631 696) (22 600 221)
Other expenses (24 631 696) (22 600 221)
Fair value adjustments on (4 765 495 021) (2 463 987 930)
Gold Bullion
Fair value adjustments 4 765 495 021 2 463 987 930
for debentures designated
at fair value through
profit or loss.
Operating profit before 45 638 718 37 005 882
tax
Taxation expense (15 679 209) (13 139 853)
Profit for the year 29 959 509 23 866 029
Other comprehensive - -
income
Total comprehensive 29 959 509 23 866 029
income for the year
Attributable to:
Owners of the entity 29 959 509 23 866 029
Statement of changes in equity for the year ended 31 March 2012
Share Retained Total
Capital Earnings
R R R
Balance at 1 April 2010
100 5 229 393 5 229 493
Total comprehensive
income for the year - 23 866 029 23 866 029
Dividends declared and
paid - (26 088 233) (26 088 233)
Balance at 31 March
2011 100 3 007 189 3 007 289
Total comprehensive
income for the year - 29 959 509 29 959 509
Dividends declared and
paid - (29 000 000) (29 000 000)
Balance at 31 March
2012 100 3 966 698 3 966 798
Statement of cash flows for the year ended 31 March 2012
2012 2011
R R
Net cash generated from 7 864 613 548 130
operating activities
Cash generated from 45 754 453 39 284 004
operations
Interest received 247 493 242 284
Dividends paid (29 000 000) (26 088 233)
Taxation paid (9 137 333) (13 127 321)
Net cash generated from 3 465 900 360 211 120 000
investing activities
Proceeds from the sale 4 059 400 360 2 610 680 000
of Gold Bullion
Purchase of Gold (593 500 000) (2 399 560 000)
Bullion
Net cash utilised in (3 466 292 490) (211 860 316)
financing activities
Proceeds from debenture 593 500 000 2 399 560 000
issue
Debentures redeemed (4 059 400 000) (2 610 680 000)
Unsold Gold Bullion (392 490) (740 316)
Net (decrease) in cash 7 472 483 (192 186)
and cash equivalents
Cash and cash - 192 186
equivalents at the
beginning of year
Cash and cash 7 472 483 -
equivalents at end of
year
NOTES
1 General information
NewGold Issuer Limited (Registration Number 2004/014119/06) ("Issuer or
NewGold") is a public company incorporated in the Republic of South Africa,
the entire issued share capital of which is held by the NewGold Owner Trust
("the Trust"), a registered, discretionary trust. The parent of the NewGold
Owner Trust is Absa Bank Limited and its ultimate holding company is
Barclays PLC. The Issuer is a special purpose vehicle incorporated for the
sole purpose of conducting an exchange traded fund ("ETF"). This enables
investors to invest in a debt instrument, the value of which tracks the
price of Gold Bullion.
The address of the registered office is 7th Floor, Absa Towers West, 15
Troye Street, Johannesburg, 2001.
2 Accounting policies
The significant accounting policies applied in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
2.1 Statement of compliance
The audited financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS), Interpretations issued
by the International Financial Reporting Interpretation Committee (IFRIC)in
the manner required by the Companies Act No 71 of 2008 (as amended), of
South Africa and the AC 500 series.
2.2 Basis of accounting and measurement
The financial statements have been prepared on an accrual basis of
accounting, except for information contained in the cash flow statement.
The measurement basis used is the historical cost basis, except for
financial assets and liabilities held at fair value through profit or loss,
which have been measured at fair value.
2.3 Functional and presentation currency
The financial statements are presented in South African Rand, which is the
entity`s functional and presentation currency. All financial information is
presented to the nearest Rand.
2.4 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. Management has
determined that the underlying assumptions are appropriate and the entity`s
financial statements therefore present the financial position fairly.
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
are included in the individual notes to the financial statements.
2.5 Recent accounting developments
New and amended standards adopted by the entity
There are no IFRSs or IFRIC interpretations that are effective for the
first time for the financial year beginning on or after 1 April 2011 that
have a material impact on the entity
New standards, amendments and interpretations issued but not effective for
the financial year beginning 1 April 2011 and not early adopted.
IFRS 7 `Financial Instruments Disclosures` (amendments) require additional
quantitative and qualitative disclosures in respect of risk exposures
arising from transferred financial assets. The amendments include a
requirement to disclose by class of asset: the nature, carrying amount and
a description of the risks and rewards of financial assets that have been
transferred to another party yet remain on the Company`s statement of
financial position. Disclosures are also required to enable a user to
understand the amount of any associated liabilities, and the relationship
between the financial assets and associated liabilities. Comparative
disclosures are not required for any period beginning before the effective
date. The amendments are effective for annual periods beginning on or after
1 July 2011 and are required to be applied retrospectively. The company is
yet to perform a detailed assessment of the amended IFRS 7`s full impact.
The company does not expect any impact. The company intends to adopt the
amended IFRS 7 no later than the accounting period beginning on or after 1
July 2011.
IFRS 7 `Financial Instruments: Disclosures` was amended in December 2011.
The disclosures required were amended to include information that will
enable users of an entity`s financial statements to evaluate the effect or
potential effect of netting arrangements, including rights of set-off
associated with the entity`s recognised financial assets and recognised
financial liabilities, on the entity`s financial position. The amendments
are effective for annual periods beginning on or after 1 January 2013 and
are required to be applied retrospectively. The company is yet to perform a
detailed assessment of the amended IFRS 7`s full impact. The company does
not expect any impact. The company intends to adopt the amended IFRS 7 no
later than the accounting period beginning on or after 1 January 2013.
IFRS 9, `Financial instruments`, addresses the classification, measurement
and recognition of financial assets and financial liabilities. IFRS 9 was
issued in November 2009 and October 2010. It replaces the parts of IAS 39
that relate to the classification and measurement of financial instruments.
IFRS 9 requires financial assets to be classified into two measurement
categories: those measured as at fair value and those measured at amortised
cost. The determination is made at initial recognition. The classification
depends on the entity`s business model for managing its financial
instruments and the contractual cash flow characteristics of the
instrument. For financial liabilities, the standard retains most of the IAS
39 requirements. The main change is that, in cases where the fair value
option is taken for financial liabilities, the part of a fair value change
due to an entity`s own credit risk is recorded in other comprehensive
income rather than the income statement, unless this creates an accounting
mismatch. The entity is yet to perform a detailed assessment of IFRS 9`s
full impact. The entity does not expect a significant impact. The entity
intends to adopt IFRS 9 no later than the accounting period beginning on or
after 1 January 2015.
IFRS 10, Consolidated financial statements` builds on existing principles
by identifying the concept of control as the determining factor in whether
an entity should be included within the consolidated financial statements
of the parent entity. The standard provides additional guidance to assist
in the determination of control where this is difficult to assess. The
entity does not expect any impact. The entity intends to adopt IFRS 10 no
later than the accounting period beginning on or after 1 January 2013.
IFRS 12, `Disclosures of interests in other entities` includes the
disclosure requirements for all forms of interests in other entities,
including joint arrangements, associates, special purpose vehicles and
other off balance sheet vehicles. The entity is yet to perform a detailed
assessment of IFRS 12`s full impact. The entity does not expect a
significant impact. The entity intends to adopt IFRS 12 no later than the
accounting period beginning on or after 1 January 2013.
IFRS 13, `Fair value measurement`, aims to improve consistency and reduce
complexity by providing a precise definition of fair value and a single
source of fair value measurement and disclosure requirements for use across
IFRSs. The requirements, which are largely aligned between IFRSs and US
GAAP, do not extend the use of fair value accounting but provide guidance
on how it should be applied where its use is already required or permitted
by other standards within IFRSs or US GAAP. The entity is yet to perform a
detailed assessment of IFRS 13`s full impact. The entity does not expect a
significant impact. The entity intends to adopt IFRS 13 no later than the
accounting period beginning on or after 1 January 2013.
IAS 1 (amendments) Presentation of Items of Other Comprehensive Income
revises the way other comprehensive income is presented by; preserving the
amendments made to IAS 1 in 2007 to require profit or loss and other
comprehensive income to be presented together or a separate `statement of
profit or loss` and a `statement of comprehensive income`; requires
entities to group items presented in other comprehensive income based on
whether they are potentially re-classifiable to profit or loss
subsequently, i.e. those that might be reclassified and those that will not
be reclassified; and requires the tax associated with items presented
before tax to be shown separately for each of the two groups of other
comprehensive income items (without changing the option to present items of
other comprehensive income either before tax or net of tax). The amendments
are effective for annual periods beginning on or after 1 July 2012 and are
required to be applied retrospectively. The entity does not expect any
impact. The entity intends to adopt the amended IAS 1 no later than the
accounting period beginning on or after 1 July 2012.
There are no IFRSs or IFRIC interpretations that are effective for the
first time for the financial year beginning on or after 1 April 2011 that
have a material impact on the entity (continued)
IAS 32 `Financial Instruments: Presentation` was amended in December 2011.
The amendments address inconsistencies in current practice when applying
the offsetting criteria in IAS 32, the amendments clarify: the meaning of
`currently has a legally enforceable right of set-off`; and that some gross
settlement systems may be considered equivalent to net settlement.The
amendments are effective for annual periods beginning on or after 1 January
2014 and are required to be applied retrospectively. The entity does not
expect any impact. The entity intends to adopt the amended IAS 32 no later
than the accounting period beginning on or after 1 January 2014.
There are no other IFRSs or IFRIC interpretations that have been issued but
are not yet effective that would be applicable at year end.
2.6 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 and loss are recognised
immediately through the profit and loss component of the statement of
comprehensive income. For other categories of financial instruments,
transaction costs (which includes incremental costs) and transaction income
(i.e. initiation fees) are capitalised to the initial carrying amount.
Financial instruments are recognised on the date when the entity enters
into contractual arrangements with counterparties to purchase or sell the
financial instruments.
The entity is required to group 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.
2.6.1 Financial instruments at fair value through profit or loss
This category includes financial instruments designated at fair value
through profit or loss and derivatives.
Financial instruments designated at fair value through profit or loss
Financial instruments are classified in this category if they meet one or
more of the criteria set out below at initial recognition, and are so
designated by management. The entity may only designate financial
instruments at fair value through profit and loss when the designation
results in more relevant information, as follows:
It eliminates or significantly reduces valuation or recognition
inconsistencies that would arise from measuring financial assets or
financial liabilities, or recognising gains or losses on them, on different
bases.
When groups of financial assets, financial liabilities or combinations
thereof are managed, and their performance evaluated, on a fair value basis
in accordance with a documented risk management or investment strategy, and
where information about the entity`s financial instruments is reported to
management on that basis. The entity has documented risk management and
investment strategies designed to manage such assets at fair value, taking
into consideration the relationship of assets to liabilities in a way that
mitigates market risks.
The entity can also designate at fair value through profit or loss if it
relates to a contract containing one or more embedded derivatives that
significantly modify the cash flows resulting from that contract.
The fair value designation, once made, is irrevocable. Measurement is
initially at fair value, with transaction costs taken directly to the
profit and loss component of the statement of comprehensive income.
Subsequent to initial recognition, the fair value is remeasured, and gains
and losses from changes therein are recognised in the statement of
comprehensive income.
Interest income from financial assets at fair value through profit or loss
is recognised in the statement of comprehensive income, within interest.
Dividend income from financial assets at fair value through profit or loss
is recognised in the statement of comprehensive income within dividend
income when the entity`s right to receive payments is established.
2.6.2 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
After initial measurement, loans and receivables are subsequently measured
at amortised cost using the effective interest rate method, less allowance
for impairment. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees and costs that are an integral
part of the effective interest rate. The amortisation is included in the
profit and loss component of the statement of comprehensive income. The
carrying amount of impaired loans on the statement of financial position is
reduced through the use of identified or unidentified impairment.
Once a loan has been written down as a result of an impairment loss,
interest income is thereafter recognised using the rate of interest used to
discount the future cash flows for the purpose of measuring the impairment
loss.
2.6.3 Financial liabilities
Financial liabilities are measured at amortised cost, except for trading
liabilities and liabilities designated at fair value, which are held at
fair value through profit and loss. The fair value of a financial liability
with a demand feature (e.g. a demand deposit) is not less than the amount
payable on demand, discounted from the first date that the amount could be
required to be paid.
2.6.4 Impairment of financial assets at amortised cost
An impairment assessment of financial assets at amortised cost is performed
at each reporting date.
Amortised cost instruments are 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.
An impairment loss in respect of an amortised cost investment is calculated
as the difference between its carrying amount and the present value of the
estimated future cash flows, discounted at the original effective interest
rate.
Loans and receivables are stated net of identified and unidentified
impairments.
A financial asset or group of financial assets is considered impaired if,
and only if, there is objective evidence of impairment as a result of one
or more events that occurred after the initial recognition of the asset
(known as the loss event) and that loss event (or events) has an impact on
the estimated future cash flows of the financial asset or group of
financial assets and can be reliably measured. In determining whether a
loss event has occurred, advances are subjected to regular evaluations that
take cognisance of, inter alia, past experience of the economic climate
similar to the current economic climate, overall customer risk profile and
payment record and the realisable value of any collateral.
Objective evidence that a financial asset or group of assets is impaired
includes observable data that comes to the attention of the entity and may
include the following loss events:
* Significant financial difficulty of the issuer or obligor;
* A breach of contract, such as a default or delinquency in interest or
principal payments;
* The entity granting to the borrower, for economic or legal reasons relating
to the borrower`s financial difficulty, a concession that the lender would
not otherwise consider;
It becoming probable that the borrower will enter insolvency or other
financial reorganisation;
* The disappearance of an active market for that financial asset because of
financial difficulties;
* Observable data indicating that there is a measurable decrease in the
estimated future cash flows from a group of financial assets since the
initial recognition of those assets, although the decrease cannot yet be
identified with the individual financial assets in the group, including:
- adverse changes in the payment status of borrowers in the group; or
- national or local economic conditions that correlate with defaults on
the assets in the group.
The entity first assesses whether objective evidence of impairment exists
individually for financial assets that are individually significant, and
individually or collectively for financial assets that are not individually
significant. If the entity determines that no objective evidence of impairment
exists for an individually assessed financial asset, whether significant or not,
it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses that group for impairment. Assets that
are individually assessed for impairment and for which an impairment loss is or
continues to be recognised, are not included in a collective assessment of
impairment.
The amount of impairment loss is measured as the difference between the asset`s
carrying amount and the present value of estimated future cash flows (excluding
future credit losses) discounted at the financial asset`s original effective
interest rate. The carrying amount of the asset is reduced through the use of a
provision account and the amount of the impairment loss is recognised in the
profit and loss component of the statement of comprehensive income. If a loan
receivable or held-to-maturity investment has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective
interest rate determined under the contract.
The calculation of the present value of the estimated future cash flows of
collateralised financial assets reflects the cash flows that may result from
foreclosure, less costs of obtaining and selling the collateral, whether or not
foreclosure is probable.
For the purposes of a collective evaluation of impairment, financial assets are
grouped on the basis of similar credit risk characteristics (i.e. on the basis
of the entity`s grading process that considers asset type, industry,
geographical location, collateral type, past-due status and other relevant
factors). These characteristics are relevant to the estimation of the cash flows
for groups of such assets by being indicative of the debtors` ability to pay all
amounts due according to the contractual terms of the assets being evaluated.
Future cash flows for a group of financial assets that are collectively
evaluated for impairment are estimated on the basis of the contractual cash
flows of the assets in the group and historical loss experienced for assets with
credit risk characteristics similar to those in the group. Historical loss
experience is adjusted on the basis of current observable data to reflect the
effects of current conditions and to remove the effects of conditions in the
historical period that do not currently exist.
Estimates of changes in future cash flows for groups of assets should reflect
and be directionally consistent with changes in related observable data from
period to period (i.e. changes in unemployment rates, property prices, payment
status, or other factors indicative of changes in the probability of losses in
the group and their magnitude). The methodology and assumptions used for
estimating future cash flows are reviewed regularly by the entity to reduce any
differences between loss estimates and actual loss experience.
Loans or other receivables, together with the associated allowance, are written
off when there are no realistic prospects of future recovery and all collateral
has been realised or has been transferred to the entity.
2.6.5 Derecognition of financial assets
A financial asset (or, where applicable a part of a financial asset or part of a
group of similar financial assets) is derecognised when:
The contractual rights to the cash flows arising from the financial assets have
expired or being forfeited by the entity; or
* The entity retains the rights to receive cash flows form the asset but has
assumed an obligation to pay for them in full without material delay to a
third party under a pass-through arrangement; 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 assets.
Where the entity has transferred its rights to receive cash flows from an asset
and has neither transferred nor retained substantially all the risks and rewards
of the asset nor transferred control of the asset, the asset is recognised to
the extent of the entity`s continuing involvement in the asset. Continuing
involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the
maximum amount of the consideration that the entity could be required to repay.
Where continuing involvement takes the form of a written and/or purchased option
(including a cash-settled option or similar provision) on the transferred asset,
the extent of the entity`s continuing involvement is the amount of the
transferred asset that the entity may repurchase, except that in the case of a
written put option (including a cash-settled option or similar provision) on an
asset measured at fair value, the extent of the entity`s continuing involvement
is limited to the lower of the fair value of the transferred asset and the
option exercise price.
2.6.6 Derecognition of financial liabilities
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.
Where an existing financial liability is replaced by another from the same
tender on substantially different terms, or the terms of an existing liability
are substantially modified, 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.
2.6.7 Fair value
Some of the entity`s financial instruments are carried at fair value through
profit or loss such as those designated by management under the fair value
option.
The fair value of a financial instrument is the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than
in a forced or liquidation sale.
The method of determining the fair value of financial instruments can be
analysed into the following categories:
(a) Level 1 - Unadjusted quoted prices 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.
(b) Level 2 - Valuation techniques using market observable inputs. Such
techniques may include:
- using recent arm`s length market transactions;
- Reference to the current fair value of similar instruments; and
- discounted cash flow analysis, pricing models or other techniques commonly
used by market participants.
(c) Level 3 - Valuation techniques, as described in (b) above, for which not all
inputs are market observable prices or rates. Such a financial instrument is
initially recognised at the transaction price, which is the best indicator of
fair value, although the value obtained from the relevant valuation model may
differ. The difference between the transaction price and the model value,
commonly referred to as `day one profit and loss`, is either amortised over the
life of the transaction, deferred until the instrument`s fair value can be
determined using market observable inputs, or realised through settlement.
2.6.8 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 has an intention to
either settle on a net basis, or realise the asset and settle the liability
simultaneously.
2.7 Share Capital
Ordinary shares
Incremental costs directly attributable to issue of ordinary shares are
recognised as a deduction from equity.
2.8 Revenue
Revenue comprises income from:
Monthly gold sales charge
This charge consists of the income earned from the sale of Gold Bullion. 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.
2.9 Cash and cash equivalents
For the purposes of the statement of cash flows, cash comprises cash on hand and
demand deposits. Cash equivalents comprise highly liquid investments that are
convertible into cash with an insignificant risk of changes in value with
original maturities of less than three months.
2.10 Provisions, contingent liabilities and contingent assets
Provisions are recognised when the entity has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management`s best estimate of
the expenditure required to settle the present obligation at the reporting date.
The discount rate used to determine the present value reflects the market
assessments of the time value of money and the increases specific to the
liability.
Transactions are classified as contingent liabilities where the existence of the
entity`s possible obligations depends on uncertain future events beyond the
entity`s control or when the entity has a present obligation that is not
probable or which the entity is unable to measure reliably.
Items are classified as commitments where the entity commits itself to future
transactions or if the items will result in the acquisition of assets.
A provision for onerous contracts is recognised when the expected benefits to be
derived by the entity from a contract is lower than the unavoidable cost of
meeting its obligation under the contract. The provision is measured at the
present value of the lower of the expected cost of terminating the contract and
the expected net cost of fulfilling the contract. Before a provision is
established, the entity recognises any impairment loss on the assets associated
with that contract.
2.11 Taxation
The taxation charge comprises current and deferred tax. Income tax expense is
recognised in the profit and loss component of the statement of comprehensive
income, except to the extent that it relates to items recognised directly in
other comprehensive income, in which case it is recognised in other
comprehensive income.
2.11.1 Current taxation
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 previous years.
The taxation charge in the financial statements for amounts due to fiscal
authorities in the various territories in which the entity 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.
2.11.2 Deferred tax
Deferred income tax is provided, using the liability method, on temporary
differences arising between the tax bases and carrying amounts of property,
plant and equipment, certain financial assets and liabilities including
derivative contracts, provisions for pensions and other post-retirement benefits
and tax losses carried forward. 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 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 extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised. Unrecognised deferred income tax assets are reassessed at
each reporting date and are recognised to the extent that it has become probable
that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and deferred income tax liabilities are offset, if a
legally enforceable right exists to set off current tax assets against current
income tax liabilities and the deferred income taxes relate to the same taxable
entity and the same taxation authority.
2.11.3 Secondary Tax on Companies (STC)
The liability to pay dividends is only recognised once the dividends are
declared.
STC is provided for at 10,0% on the net of dividends declared less dividends
received (unless exempt from STC) by the entity at the same time as the
liability to pay the related dividends is recognised. STC credits that arise
from dividends received and receivable that exceed dividends paid are accounted
for as a deferred tax asset. STC is included in the `Taxation expense` line in
the profit and loss component of the statement of comprehensive income.
"Dividend Withholding Tax (""DWT"") is a final tax, and is levied on the
beneficial owner of the dividend in respect of all dividends paid by South
African ("SA") companies as well as foreign companies listed on the JSE. 15% DWT
is applicable unless an exemption applies or a reduced rate applies in terms of
a Double Taxation Agreement ("DTA").
In the case of unlisted companies, the company is responsible to deduct and pay
over the DWT to the SA Revenue Service ("SARS") on behalf of the beneficial
owner. With regard to companies listed on the JSE, the DWT will be withheld and
paid over to the SARS by the "regulated intermediary" on behalf of the
beneficial owner. The beneficial owner of the dividend is, however, ultimately
liable for the DWT and must pay over the tax to the SARS unless the tax has been
paid by some other person. DWT is expected to have an impact on the entity, and
is effective from 1 April 2012."
2.11.4 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 as part of the expense items as applicable; and receivables
and payables that are stated with the amount of VAT included.
The net amount of VAT recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the statement of financial
position.
2.12 Inventory
Inventory comprise 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.
2.13 Foreign currency translation and balances
Transactions in foreign currencies are translated to the functional currency of
the entity 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 the reporting
date. The foreign currency gain or loss on monetary items is the difference
between the 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.
2.14 Operating segments
NewGold Issuer Limited offers only one product being the NewGold debentures
which track 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 are 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).
28 June 2012
Sponsor
Absa Capital
(the investment banking division of Absa Bank Limited, affiliated with Barclays)
Date: 28/06/2012 17:22:04 Produced by the JSE SENS Department.
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