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ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
The Sygnia Itrix Collective Investment Scheme
Sygnia Itrix MSCI World Exchange Traded Fund (The Fund)
JSE code: SYGWD
ISIN: ZAE000249553
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 114 087 202 98 793 055
Net fair value gain on investments at fair value
802 017 418 198 739 857
through profit or loss
916 104 620 297 532 912
EXPENSES
Foreign exchange loss on dividends (3 433 831) (11 689 477)
Management and administrative expenses (27 445 717) (23 657 676)
(30 879 548) (35 347 153)
OPERATING PROFIT BEFORE DISTRIBUTION 885 225 072 262 185 759
Comprising:
Income available for distribution before tax 83 207 654 63 445 902
Capital gain retained 802 017 418 198 739 857
Distributions (62 989 959) (54 221 803)
Profit before tax 822 235 113 207 963 956
Withholding tax (15 524 738) (14 261 971)
Profit for the year 806 710 375 193 701 985
Other comprehensive income not reclassified to
profit or loss
Translation of functional currency to ZAR (543 945 113) (455 444 009)
Total comprehensive income and increase/(decrease)
in net assets attributable to holders of redeemable 262 765 262 (261 742 024)
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
5 489 364 489 3 660 082 970
profit or loss
Trade and other receivables 5 281 286 4 034 254
Cash and cash equivalents 38 800 612 31 480 909
Total assets 5 533 446 387 3 695 598 133
LIABILITIES
Net assets attributable to holders of redeemable
5 497 005 952 3 661 697 194
securities
Trade and other payables 36 440 435 33 900 939
Total liabilities 5 533 446 387 3 695 598 133
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 3 489 591 212
Profit for the year 193 701 985
Creation of redeemable securities 579 917 841
Redemption of redeemable securities (146 069 835)
Foreign currency translation adjustments (455 444 009)
BALANCE AT 31 DECEMBER 2016 3 661 697 194
Profit for the year 806 710 375
Creation of redeemable securities 1 725 831 979
Redemption of redeemable securities (153 288 483)
Foreign currency translation adjustments (543 945 113)
BALANCE AT 31 DECEMBER 2017 5 497 005 952
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
2017 2016
R R
Cash utilised by operations (11 415 296) (24 342 188)
Dividends received 107 190 888 96 761 207
Management fees paid (33 364 795) (23 775 287)
Interest received 10 315 71 456
Net cash inflow from operating activities 62 421 112 48 715 188
Cash outflow from investing activities (1 571 209 215) (432 521 460)
Purchase of listed investments (1 571 209 215) (432 521 460)
Cash inflow from financing activities 1 516 107 806 376 816 698
Proceeds on creation of securities 1 725 831 979 579 917 841
Payment on redemption of securities (153 288 483) (146 069 835)
Distributions paid to investors (56 435 690) (57 031 308)
Net increase/(decrease) in cash and cash
7 319 703 (6 989 574)
equivalents
Cash and cash equivalents at the beginning of
31 480 909 38 470 483
year
Cash and cash equivalents at the end of year 38 800 612 31 480 909
SYGNIA ITRIX MSCI WORLD SECURITIES
2017 2016
Number Number
Total redeemable securities in issue 211 800 000 153 000 000
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 MSCI World
redeemable securities.
CREATIONS AND REDEMPTIONS
There were 64 800 000 (2016: 24 000 000) Index Securities created during the year,
amounting to a value of R1 725 831 979 (2016: R579 917 841).
There were 6 000 000 (2016: 6 000 000) Index securities redeemed during the year for
a value of R153 288 483 (2016: R146 069 835).
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DISTRIBUTIONS
The Fund effects semi–annual distributions. All distributions are made out of the
income of the Fund.
The rebates represent an investor’s partial reduction of the 68.4 basis points
management fee charged (2016: 68.4 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 per Sygnia
Itrix MSCI World
Security:
2017 2016
R R
Declared distributions (60 464 459) (53 761 719)
0.20630 rand per security
Declared June 2017 and paid July 2017 (32 802 172)
0.22676 rand per security
Declared June 2016 and paid July 2016 (32 653 702)
0.13188 rand per security
Declared December 2017 and paid January 2018 (27 662 287)
0.13625 rand per security
Declared December 2016 and paid January 2017 (21 108 017)
Management fees refunded during the year as a rebate
(2 525 500) (460 084)
distribution
Total distribution expense for the year (62 989 959) (54 221 803)
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 0.684% of assets under
management on a daily basis (2016: 0.684% of assets under management). The Fund had a
TER of 68.4 basis points (2016: 68.4 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
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each fund under their management.
This is a requirement in terms of the Association for Savings and Investments South
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 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 the following reasons:
• The Fund’s largest financial instruments are listed equity instruments. These
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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
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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