| Thu 28 Jun 2012, 17:21 | | NRD - Trackhedge (Proprietary) Limited - Summarised audited results for the year |
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JSE NRD
THG
NRD - Trackhedge (Proprietary) Limited - Summarised audited results for the year
ended 31 March 2012
TRACKHEDGE (PROPRIETARY) LIMITED
(Registration number 2003/008245/07)
Issuer code: THG
JSE Code: NRD
ISIN: ZAE000047841
("Trackhedge" or "the ETF")
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2012
Statement of financial position as at 31 March 2012
Notes 2012 2011
ASSETS R R
Unlisted investments 3 73 450 695 641 322 370
Cash and cash equivalents 4 9 581 9 248
Trade and other receivables 5 9 591 61 307
Current tax receivable 7 068 12 939
TOTAL ASSETS 73 476 935 641 392 925
EQUITY AND LIABILITIES
Share capital and reserves (99 557) 29 574
Share capital 6 1 1
Retained Earnings/ (99 558) 29 573
(Accumulated Loss)
Liabilities
NewRand Index Securities 7 73 450 695 641 322 370
Trade and other payables 8 125 797 40 981
TOTAL EQUITY AND 73 476 935 641 392 925
LIABILITIES
Statement of comprehensive income for the year ended 31 March 2012
Notes 2012 2011
R R
Revenue
Interest Income 360 106
Trust distribution 51 623 48 368
Write off - -
Unrealised gain on 3 5 490 117 112 889 388
unlisted investments
Fair value adjustment on 7 (5 490 117) (112 889 388)
NewRand Index Securities
Operating profit before 54 983 48 474
operating expenditure
Bank Charges (27) -
Write off - Receivable (12 939) -
Profit before taxation 11 39 017 48 474
Income tax expense 12 (168 148) (13 549)
(Loss)/Profit for the (129 131) 34 925
year
Total comprehensive 34 925 34 925
income for the year
Profit attributable to:
Owners of the entity (129 131) 34 925
Statement of changes in equity for the year ended 31 March 2012
Share Retained Total
Capital Earnings
R R R
Opening Balance as at 1 (5 352) (5 351)
April 2010 1
Total comprehensive income 34 925 34 925
for the year
Balance at 31 March 2011 1 29 573 29 574
Total comprehensive income (129 131) (129 131)
for the year
Balance at 31 March 2012 1 (99 558) (99 557)
Statement of cash flows for the year ended 31 March 2012
Notes 2012 2011
R R
Net cash generated from 333 106
operating activities
Cash (utilised)/generated by 13.1 110 627 (21 880)
operations
Taxation paid 13.2 (162 277) (26 488)
Interest received 360 106
Trust distribution 51 623 48 368
Net increase in cash and cash 333 106
equivalents
Cash and cash equivalents at 4 9 248 9 142
the beginning of year
Cash and cash equivalents at 4 9 581 9 248
end of year
NOTES
General Information
Trackhedge Proprietary Limited (Registration number 2003/008245/07) ("Issuer")
is a private company incorporated in the Republic of South Africa, the entire
issued share capital is held by the NewRand Owner Trust ("the Trust"), a
registered discretionary trust. The Issuer is a special purpose vehicle
incorporated for the sole purpose of issuing NewRand Index Securities ("Index
Securities") listed on the JSE Limited. Index Securities are created with an
objective to track the performance of a customised index of Rand hedge shares
created by Absa Capital, a division of Absa Bank Limited and provided and
calculated by FTSE and the JSE Limited ("JSE") ("NewRand Index", "Index"). The
Index composition and calculation methodology were designed with an objective to
maximise long-term correlation with the Rand/USD exchange rate.
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 JSE listing requirements.
2.2 Basis of measurement
The financial statements have been prepared on an accrual basis of accounting,
except for cash flow information. The measurement basis used is the historical
cost basis, except for available-for-sale financial assets, financial assets and
liabilities held at fair value through profit or loss and all derivative
contracts, 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 company
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 company.
New standards, amendments and interpretations issued but not effective for the
financial year beginning 1 April 2011 and not early adopted
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 a significant 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 company is yet to perform a
detailed assessment of IFRS 9`s full impact. The company does not expect a
significant impact. The company 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 company. The standard provides additional guidance to assist in the
determination of control where this is difficult to assess. The company does
not expect any impact. The company 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 company is yet to perform a detailed assessment of IFRS 12`s full
impact. The company does not expect a significant impact. The company 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 company is yet to perform a detailed assessment of IFRS
13`s full impact. The company does not expect a significant impact. The company
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 company is yet to
perform a detailed assessment of the amended IAS 1`s full impact. The company
does not expect any impact. The company intends to adopt the amended IAS 1 no
later than the accounting period beginning on or after 1 July 2012.
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 company is yet to
perform a detailed assessment of the amended IAS 32`s full impact. The company
does not expect any impact. The company intends to adopt the amended IAS 32 no
later than the accounting period beginning on or after 1 January 2014.
There are no other IFRS 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 or loss are recognised immediately through the
profit or 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. Regular way purchases and sales of financial
instruments are accounted for on trade date.
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
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 profit or loss.
Interest income from financial assets at fair value through profit or loss is
recognised in profit or loss income, within interest. Dividend income from
financial assets at fair value through profit or loss is recognised in profit or
loss 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 or 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.
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.
Loans and receivables are stated net of identified and unidentified impairments.
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;
* 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 De-recognition 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 De-recognition 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
de-
recognition 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 held for trading and those designated by management
under the fair value option and non-cash flow hedging derivatives.
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.
The valuation techniques in (b) and (c) use inputs such as interest rate yield
curves, equity prices, volatilities of the underlying and correlations between
inputs. The models used in these valuation techniques are calibrated against
industry standards, economic models and to observed transaction prices where
available.
2.7 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 either to settle
on a net basis, or realise the asset and settle the liability simultaneously.
2.8 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.
2.9 Revenue
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the entity and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is
recognised:
Revenue comprises interest income and trust distributions.
Interest is recognised on a time proportion basis, taking account of the
principal outstanding and the effective interest rate over the period to
maturity, when it is probable that such income will be received by the company.
The income earned by NewRand trust vests with Trackhedge Proprietary Limited.
Trust distributions are the funds distributed from NewRand Trust to Trackhedge
Proprietary Limited.
2.10 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.
2.11 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 income tax is provided on temporary differences arising from
investments in subsidiaries and associates, except where the timing of the
reversal of the temporary difference is controlled by the Group and it is
probable that the difference will not reverse in the foreseeable future.
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
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
will be effective from 1 April 2012.
2.12 Operating Segments
The Index Securities issued by Trackhedge Proprietary Limited are listed on the
JSE, thus Trackhedge Proprietary Limited falls within the scope of IFRS 8 :
Operating Segments. Refer to note 16.
28 June 2012
Sponsor
Absa Capital
(the investment banking division of Absa Bank Limited,affiliated with Barclays)
Date: 28/06/2012 17:21:52 Produced by the JSE SENS Department.
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