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ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017 - SYGUK
The Sygnia Itrix Collective Investment Scheme
Sygnia Itrix FTSE 100 Exchange Traded Fund (The Fund)
JSE code: SYGUK
ISIN: ZAE000249520
A portfolio in the Sygnia Itrix Collective Investment Scheme (Sygnia Itrix), registered as
such in terms of the Collective Investment Schemes Control Act, 45 of 2002 (CISCA).
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
RESTATED
2017 2016
R R
REVENUE
Investment income 42 685 440 41 552 293
Net fair value gain on investments at fair value
67 896 481 131 806 146
through profit or loss
110 581 921 173 358 439
EXPENSES
Management and administrative expenses (10 054 403) (7 320 710)
(10 054 403) (7 320 710)
OPERATING PROFIT BEFORE DISTRIBUTION 100 527 518 166 037 729
Comprising:
Income available for distribution before tax 32 631 037 34 231 583
Capital gain retained 67 896 481 131 806 146
Distributions (28 476 911) (27 919 490)
Profit before tax 72 050 607 138 118 239
Withholding tax (763 236) (1 213 751)
Profit for the year 71 287 371 136 904 488
Other comprehensive income not reclassified to
profit or loss
Translation of functional currency to ZAR (7 553 157) (308 019 581)
Total comprehensive income and increase/(decrease)
in net assets attributable to holders of redeemable 63 734 214 (171 115 093)
securities
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
2017 2016
R R
ASSETS
Listed investments held at fair value through profit
835 171 945 964 078 411
or loss
Trade and other receivables 2 354 229 2 132 376
Cash and cash equivalents 18 698 889 17 062 587
Total assets 856 225 063 983 273 374
LIABILITIES
Net assets attributable to holders of redeemable
842 009 549 967 377 620
securities
Trade and other payables 14 215 514 15 895 754
Total liabilities 856 225 063 983 273 374
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SECURITIES
FOR THE YEAR ENDED 31 DECEMBER 2017
R
BALANCE AT 1 JANUARY 2016 1 015 578 957
Creation of redeemable securities 122 913 756
Profit for the year 136 904 488
Foreign currency translation adjustments (308 019 581)
BALANCE AT 31 DECEMBER 2016 967 377 620
Redemption of securities (189 102 285)
Profit for the year 71 287 371
Foreign currency translation adjustments (7 553 157)
BALANCE AT 31 DECEMBER 2017 842 009 549
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
2017 2016
R R
Cash utilised by operations (3 081 884) (1 214 234)
Dividends received 42 461 789 41 813 545
Interest received 1 798 34 385
Management fees paid (7 493 957) (7 854 520)
Net cash inflow from operating activities 31 887 746 32 779 176
Cash inflow/(outflow) from investing activities 189 190 707 (127 003 887)
Sale/(purchase) of listed investments 189 190 707 (127 003 887)
Cash (outflow)/inflow from financing activities (219 442 151) 93 407 977
Distributions paid to investors (30 339 867) (29 505 779)
Redemption of securities (189 102 284) -
Proceeds on creation of redeemable securities - 122 913 756
Net increase/(decrease) in cash and cash equivalents 1 636 302 (816 734)
Cash and cash equivalents at the beginning of year 17 062 587 17 879 321
Cash and cash equivalents at the end of year 18 698 889 17 062 587
SYGNIA ITRIX FTSE 100 REDEEMABLE SECURITIES
2017 2016
Number Number
Total redeemable securities in issue 6 610 000 8 100 000
In terms of the Trust Deed and CISCA, the Fund would be required to pay the net
asset value attributable to investors on redemption of securities.
Vested income beneficiaries include all holders of Sygnia Itrix FTSE 100 redeemable
securities.
CREATIONS AND REDEMPTIONS
There were no (2016: 1 000 000) Index Securities created during the year (2016: R122
913 756).
There were 1 490 000 (2016: Nil) redemptions during the year, amounting to R189 102
285 (2016: Nil).
DISTRIBUTIONS
The Fund effects semi–annual distributions. All distributions are made out of the
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income of the Fund.
The rebates represent an investor’s partial reduction of the 85.5 basis points
management fee charged (2016: 85.5 basis points management fee charged).
The rebate is calculated using a sliding scale that is dependent on the size of the
investor’s investment.
During the year under review, the following distributions were effected by Sygnia
Itrix FTSE 100 Index Redeemable Security:
2017 2016
R R
Declared distributions (27 635 457) (27 017 121)
2.18481 rand per security
Declared June 2017 and paid July 2017 (17 696 929)
2.1431 rand per security
Declared June 2016 and paid July 2016 (15 216 208)
1.50166 rand per security
Declared December 2017 and paid January 2018 (9 938 528)
1.43944 rand per security
Declared December 2016 and paid January 2017 (11 800 913)
Management fees refunded during the year as a rebate
(841 454) (902 369)
distribution
Total distribution expense for the year (28 476 911) (27 919 490)
TOTAL EXPENSE RATIO (TER)
The TER represents the total expense to the Fund. The only expense of the Fund is
the management fee payable to the Manager, which is calculated at 0.855% of the assets
under management on a daily basis (2016: 0.855% of assets under management).The Fund
had a TER of 85.5 basis points (2016: 85.5 basis points).
The TER disclosed is calculated based on the highest management fee scale applicable.
The actual management fee scale is a sliding scale with significant fee reductions
applied for larger investment amounts.
Increased consumer demand for greater transparency in financial services and the
recognition thereof by the collective investment industry requires Collective
Investment Scheme (CIS) managers to calculate and publish a total expense ratio for
each fund under their management.
This is a requirement in terms of the Association for Savings and Investments South
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Africa (ASISA) standard on the calculation and publication of total expense ratios.
STATEMENT OF COMPLIANCE
The information in this summarised report has been extracted from the audited annual
financial statements, which were prepared in accordance with the JSE Listing
Requirements for abridged reports, and the requirements of CISCA, in order to meet
the requirements of the Trust Deed approved by the Financial Services Board.
The listing requirements require abridged reports to be prepared in accordance with
the framework concepts and the measurement and recognition of International Financial
Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, and the Financial Reporting Pronouncements as issued
by the Financial Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. This announcement does
not include the information required pursuant to paragraph 16A(j) of IAS 34. The full
report is available on the issuer’s website, at the issuer’s registered offices and
upon request.
These financial statements were authorised for issue by the board of directors of
the Manager on 27 March 2018.
ACCOUNTING POLICIES
The accounting policies applied in the preparation of the financial statements from
which the summary financial statements were derived are in terms of International
Financial Reporting Standards and are consistent with those accounting policies
applied in the preparation of the previous annual financial statements except for
the correction of the foreign currency to presentation currency translation which
has been reflected in other comprehensive income. The correction hereof had no
impact on the amounts reflected in the Statement of Financial Position, Statement of
Cash flows or the Profit/(loss) Before Tax presented in 2016.
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following standards, amendments to standards and interpretations effective for
the first time in future accounting periods and which are relevant to the Fund have
not been early adopted.
IFRS 9 Financial Instruments IFRS 9 will be effective for the Fund’s annual reporting
period starting 1 January 2018. IFRS 9 will replace the current classification,
recognition and measurement requirements of IAS 39 Financial Instruments: Recognition
and Measurement. Management expects that the impact of the application of IFRS 9 in
the financial statements will be minimal for to the following reasons:
• The Fund’s largest financial instruments are listed equity instruments. These
instruments are currently measured at fair value through profit or loss. IFRS 9
requires that all equity instruments be measured at fair value with changes in
profit or loss, except for those equity instruments not held for trading and for
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which the entity has elected to present the changes in fair value in other
comprehensive income. The Fund is not making use of this alternative accounting
option.
• Trade and other receivables are comprised of short-term receivables with established
rights and low risk of default. These instruments will continue to be measured at
amortised cost in accordance with IFRS 9. It is expected that any associated credit
losses on these receivables will be minimal.
• The financial liabilities are comprised mostly of redeemable securities, which are
designated at fair value through profit or loss. The Fund will continue to designate
the liabilities at fair value through profit or loss in accordance with IFRS 9.
This is because the liabilities are managed and the performance evaluated on a fair
value basis.
• Trade and other payables that are financial instruments will continue to be measured
at amortised cost. These payables are comprised of short-term payables.
• Fair value changes, dividend income and equalisation on investment appropriations
will be recognised in accordance with IFRS 9. The recognition and measurement of
these items will remain consistent with the current accounting policy.
IFRS 15 Revenue from Contracts with Customers - IFRS 15 will be effective for the
Fund’s annual reporting period starting 1 January 2018. IFRS 15 replaces the current
effective standards on recognition and measurement of revenues, including IAS 18
Revenue. Management expects that there will be no impact on the application of IFRS 15
due to the following:
• IFRS 15 excludes those contractual rights and obligations within the scope of IFRS
9. As noted above, all investment returns will be accounted for in accordance with
IFRS 9.
IFRS 16 Leases - IFRS 16 will be effective for the Fund’s annual reporting period
starting 1 January 2019. IFRS 16 provides a single-lessee accounting model, specifying
how leases will be recognised, measured and disclosed. Management expects that there
will be no impact on the application of IFRS 16 in the current reporting period.
IFRS 17 Insurance Contracts - IFRS 17 will be effective for the Fund's annual reporting
period starting 1 January 2021. IFRS 17 provides a single accounting model that measures
insurance contracts using current estimates. Management expects that there will be no
impact on the application of IFRS 17 in the current reporting period.
INVESTMENT INCOME
Investment income comprises:
• Interest income earned on cash and cash equivalents;
• Cash equalisation component on creations (at the time of creation it represents the
income portion attributable to the net asset value at the time that is payable by
the creating party); and
• Dividends from listed equities held at fair value through profit or loss.
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INTEREST INCOME
Interest income is recognised in profit or loss using the effective interest method,
taking into account the expected timing and amount of cash flows.
DIVIDEND INCOME
Dividend income is recognised when the right to receive the payment is established.
This is usually the ex-dividend date for quoted equities.
AUDIT REPORT
This summarised report is itself not reviewed or audited, but is extracted from the
underlying audited information. The audited annual financial statements for the year
ended 31 December 2017 from which the summarised report has been extracted were audited
by Deloitte and Touche, who expressed an unmodified opinion thereon. A copy of the
auditor’s report on the audited annual financial statements is available for inspection
at the company’s registered office together with the annual financial statements
identified in the respective auditor’s reports.
A full copy of these financial statements is available on the Sygnia website:
https://www.sygnia.co.za/etfs/documents.
DIRECTORS’ RESPONSIBILITY
The directors take full responsibility for the preparation of the abridged report
and confirm that the financial information was correctly extracted from the
underlying annual financial statements.
Sponsor
Vunani Corporate Finance
Trustee
Standard Bank of SA Limited
Manager
Sygnia Itrix (RF) Proprietary Limited
28 March 2018
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