An ADR is a US dollar denominated negotiable certificate that represents ownership of shares in a non-US company.
Each ADR is issued by a U.S. depositary bank (which is a bank in the US which oversees all the stock transfer and agency services in connection with a depository receipt program) and represents one or more shares of a foreign stock or a fraction of a share. If investors own an ADR they have the right to obtain the foreign stock it represents, but U.S. investors usually find it more convenient to own the ADR. The price of an ADR is often close to the price of the foreign stock in its home market, adjusted for the ratio of the foreign company’s shares to ADRs. ADRs were specifically designed to facilitate the purchase, holding and sale of non-U.S. securities by US investors.
Impala Platinum’s ADRs represent Impala Platinum’s ordinary shares deposited with the depositary bank (Deutsche Bank Trust Company Americas), to underlie such certificates and carry the rights attached to them as detailed in the Deposit Agreement. Holders of ADRs receive dividends in US dollars and have the right to vote on shareholder resolutions, where applicable.
The terms ADR and ADS are often used interchangeably. Individual shares of a foreign corporation represented by an ADR are called American Depository Shares (ADS). This is the instrument that is actually traded. Although the terms ADR and ADS are used interchangeably, the difference is that an ADR is the certificate while the ADSs are the shares.