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JSE - JSE Limited - Reviewed condensed consolidated interim financial

Release Date: 16/08/2011 15:25
Code(s): JSE
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JSE - JSE Limited - Reviewed condensed consolidated interim financial statements for the six months ended 30 June 2011 and special dividend declaration JSE LIMITED (Incorporated in the Republic of South Africa) (Registration number: 2005/022939/06) Share Code: JSE ISIN Code: ZAE000079711 REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2011 AND SPECIAL DIVIDEND DECLARATION Introduction Market uncertainty, which dampened investor appetite as global sovereign debt concerns lingered, cast a shadow over the six months to 30 June 2011. In this climate, and given the impact of volatility and volumes on JSE revenues, the Group performed better than in 2010. It remains focused on delivering its major strategies in a time of rapid change in the exchange industry. Financials Revenue increased by 7% to R667.9 million for the six months (H1 2010: R623.3 million) boosted by solid performances from the cash equities, commodities derivatives and currency derivatives markets. All divisions contributed revenue increases. Other income decreased by 2%, mainly owing to lower income from the Investor Protection Funds. Personnel costs fell by 11% primarily as a result of the deployment of staff to capital projects resulting in their salary costs being capitalised, as well as the first tranche of the 2006 Long Term Incentive Scheme for key staff fully vesting at end-2010 and therefore not being expensed in H1 2011. Other expenses were largely in line with H1 2010. An amount of R7.9 million was incurred as a result of the issue of 156 536 options to the JSE Empowerment Fund Trust. These options had been forfeited by the original black shareholders in terms of the rules of the Black Shareholder Retention Scheme. The Group`s consolidated effective tax rate for the six months to 30 June 2011 was 31% (H1 2010: 33%). As a result of the revenue growth, reduced operating costs and a lower effective tax rate, profit for the period climbed by 22% to R253.8 million during the period (H1 2010: R207.6 million). Strategy In the first six months, the JSE has: - completed the integration of the interest rate market trading platforms so that there is now a single platform for the trading of interest rate products; - delivered the first phase of the remote disaster recovery site; and - made good progress in implementing the new state-of-the-art data centre, which is scheduled to be completed before year-end. Testing of the new equities back office system (including equities clearing and settlement and surveillance systems) is progressing. Implementation has been delayed to 2012 to give the JSE and its equities members more time for readiness testing. As the system will be implemented in 2012, the depreciation of the system will only start in 2012. Work on replacing the existing cash equities trading platform with the faster and more efficient system proceeds according to plan. Implementation will be during 2012. The equity derivatives team has worked hard to encourage trading of single stock futures (SSF) on the central order book. The growth in the use of the central order book for SSF means we are now also focusing on the technology required to sustain this growth. We are making slow progress on developing a strategy to grow the interest rate market and believe we are getting close to the time when a definitive position needs to be taken on the way forward. During the period, the JSE implemented a single trading rule book for the interest rate market as well as a unified set of Debt Listings Requirements. Together, these simplify the listing and trading of bonds and bond derivatives on a single trading platform. Revenue streams Issuer services: A combination of annual and new equity listing fees, as well as interest rate issuances, accounted for much of the 6% revenue rise to R48.8 million (H1 2010: R45.8 million). Though there is a listings pipeline, potential new issuers remain hesitant about the current economic environment. This is in line with the experience of other World Federation of Exchanges members. During the period, five listings occurred (H1 2010: six). Eight delistings (H1 2010: 10) took place, five after offers to shareholders, two owing to liquidations and one owing to failure to comply with JSE Listings Requirements. Equity market: The number and value of equity trades grew strongly in Q1 2011 (over Q1 2010) but dipped in Q2, recovering in June. In total, the number of trades climbed 5% and value traded 4% in H1 2011 (over H1 2010). As a result, equity trading revenues rose by 5% to R172.6 million (H1 2011: R164.8 million). Risk management, clearing and settlement revenues and revenues from the JSE`s back office system, which equities members are mandated to use, rose by 10% and 11% respectively, owing to increased transaction volumes. In total, equities revenue rose by 8% to R371.7 million (H1 2010: R344.5 million). Equity derivatives market: Equity derivative revenue climbed 5% to R55.9 million (H1 2010: R53.3 million) as a 4% dip in the number of contracts traded was countered by a 12% rise in value traded. The market faces strong competition for single stock derivatives from over the counter products. Most growth occurred in index derivatives and bespoke products. Currency derivatives market: Currency derivatives revenue climbed 44% to R7.2 million during the period (H1 2010: R5.0 million) owing to a 96% growth in contracts traded and 88% in value traded. This growth is attributable to a change in billing model to encourage more trade, an increase in number of instruments and the introduction of bespoke, on-market products. Commodity derivatives: Revenue grew 15% to R23.6 million (H1 2010: R20.6 million) owing to increased trade (61% in value terms and 17% in number of contracts), in a context of rising agricultural prices. Local maize and wheat derivatives continue to make up most trade in this market, but the trade of foreign-referenced instruments continues to rise. These instruments are offered under license from the CME Group, the world`s largest derivatives exchange. During the period, the market introduced a wheat contract referencing pricing from the CME Group. Interest rate market: , secondary trade rose by 36% in nominal value, resulting in 16% revenue growth to R19.0 million (H1 2010: R16.4 million). Information products sales: Despite a contraction in data sales to existing clients locally and internationally, revenue grew 4% to R61.1 million (R58.7 million) as the team continued to attract new international clients. Prospects Revenue projections are not possible in the stock exchange industry, given the dependence on trading volumes in all the markets. Expenses are expected to increase from 2012 as a result of depreciation charges starting once the Group`s major systems have been implemented next year. The JSE continues to focus on growing all of its markets, diversifying revenue streams and implementing strategic goals. Capital structure At 30 June 2011, the JSE had no long-term borrowings and R1 006 million in cash reserves (2010: R906 million). The Exchange analyses its capital requirements in a number of categories: - first, to ensure a smoothly operating stock exchange, the JSE sets aside sufficient cash to fund four months of operations; - second, as the JSE guarantees all central order book equities trades, it sets aside sufficient cash to ensure settlement of qualifying transactions; - third, the JSE must be in a position to maintain infrastructure and meet capital needs for expansion, so we set aside a portion of cash to fund these types of outflows; and - fourth, the cash component of the Investor Protection Funds comprises R118 million of the total (2010: R118 million). On the basis of this assessment, the Board has determined how much cash we need to retain and revisits this regularly. Cash dividend declaration Given that the JSE is coming to the end of large capital expenditure in respect of its System Replacement Project, the directors of the JSE have considered the adequacy of the cash balances and consider that there are balances surplus to our current needs. In light of this, the Board has declared a special dividend amounting to R200 million gross of taxes. This amounts to a net dividend of 210 cents per share. The salient dates for the payment of the dividend are as follows: To be released on SENS on Tuesday, 16 August 2011 Last date to trade JSE shares cum dividend Friday, 2 September 2011 JSE shares trade ex dividend Monday, 5 September 2011 Record date for purposes of determining the Friday, 9 September 2011 registered holders of JSE shares to participate in the dividend at close of business on Date of payment of dividend Monday, 12 September 2011 Share certificates may not be dematerialised or rematerialised from Monday, 5 September 2011 to Friday, 9 September 2011, both days inclusive. Note: Percentage changes in the above are calculated on full number and not the rounded numbers which appear in the text. For and on behalf of the Board HJ Borkum RM Loubser Chairman Chief Executive Officer 16 August 2011 CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME for the six months ended 30 June 2011 JSE Group Six months ended Year ended 30 June 30 June 31 Dec 2011 2010 2010
Note (reviewed) (reviewed) (audited) R`000 R`000 R`000 Revenue 7 667 948 623 301 1 255 148 Other income 20 785 21 102 50 267 Personnel expenses (134 864) (150 871) (338 098) Other expenses (240 923) (242 340) (541 087) Profit before net 312 946 251 192 426 230 finance income Finance income 437 795 536 987 1 027 947 Finance costs (395 741) (493 337) (940 957) Net finance income 42 054 43 650 86 990 Share of profit of 15 053 14 225 26 446 equity accounted investees (net of income tax) Profit before tax 370 053 309 067 539 666 Income tax expense (116 228) (101 508) (161 659) Profit for the period 253 825 207 559 378 007 Other comprehensive loss Net change in fair value (2 320) (7 865) 29 660 of available-for-sale financial assets Net change in fair value (8 612) (9 229) (31 893) of available-for-sale financial assets reclassified to profit or loss Income tax on other - - - comprehensive loss Other comprehensive loss (10 932) (17 094) (2 233) for the period, net of income tax Total comprehensive 242 893 190 465 375 774 income/(loss) for the period Profit attributable to: Owners of the Exchange 253 825 207 559 378 007 Profit for the period 253 825 207 559 378 007 Total comprehensive income/(loss) attributable to: Owners of the Exchange 242 893 190 465 375 774 Total comprehensive 242 893 190 465 375 774 income/(loss) for the period Earnings per share Basic earnings per share 299.0 244.1 445.5 (cents) Diluted earnings per 8 294.4 240.4 438.4 share (cents) CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME (CONTINUED) for the six months ended 30 June 2011 Investor Protection Funds* Six months ended Year ended 30 June 30 June 31 Dec 2011 2010 2010
(reviewed) (reviewed) (audited) R`000 R`000 R`000 Revenue - - - Other income 10 603 11 299 36 082 Personnel expenses - - - Other expenses (3 950) (7 599) (15 334) Profit before net 6 653 3 700 20 748 finance income Finance income 3 707 4 393 8 886 Finance costs - - - Net finance income 3 707 4 393 8 886 Share of profit of - - - equity accounted investees (net of income tax) Profit before tax 10 360 8 093 29 634 Income tax expense - - - Profit for the period 10 360 8 093 29 634 Other comprehensive loss Net change in fair value (2 320) (7 865) 29 660 of available-for-sale financial assets Net change in fair value (8 612) (9 229) (31 893) of available-for-sale financial assets reclassified to profit or loss Income tax on other - - - comprehensive loss Other comprehensive loss (10 932) (17 094) (2 233) for the period, net of income tax Total comprehensive (572) (9 001) 27 401 income/(loss) for the period Profit attributable to: Owners of the Exchange 10 360 8 093 29 634 Profit for the period 10 360 8 093 29 634 Total comprehensive income/(loss) attributable to: Owners of the Exchange (572) (9 001) 27 401 Total comprehensive (572) (9 001) 27 401 income/(loss) for the period Earnings per share Basic earnings per share 12.2 9.5 34.9 (cents) Diluted earnings per 12.0 9.4 34.4 share (cents) *Investor Protection Funds comprises the JSE Guarantee Fund Trust, JSE Derivatives Fidelity Fund Trust and BESA Guarantee Fund Trust (the "Trusts"). The JSE maintains these Trusts for investor protection purposes as required under the Securities Services Act 36, of 2004. The JSE is required to consolidate the Trusts into the results of the Group in terms of International Financial Reporting Standards (IFRS). However, as these Trusts are legally separate from the JSE, neither the JSE nor its shareholders have any right to the net assets of these Trusts on winding up. In certain limited circumstances, the JSE is entitled to the income and surplus assets of the Trusts. For enhanced understanding, the Trusts have been shown separately, (before intercompany adjustments), although, for compliance with IFRS, the results form part of the Group financial statements. CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2011 Attributable to owners of the Exchange Non- distribu- Shares
Share Share table BBBEE pending capital premium reserve reserve allotment Group R`000 R`000 R`000 R`000 R`000 Balance at 8 514 162 779 10 058 160 192 - 31 December 2009 Total - - - - - comprehensive income for the period Transactions with (48) (32 121) - (137) - owners of the Exchange, recognised directly in equity Balance at 8 466 130 658 10 058 160 055 - 30 June 2010 (reviewed) Balance at 8 514 162 779 10 058 160 192 - 31 December 2009 Total - - - - - comprehensive income for the year Transactions with (48) (32 121) - (311) - owners of the Exchange, recognised directly in equity Balance at 8 466 130 658 10 058 159 881 - 31 December 2010 Total - - - - - comprehensive income for the year Transactions with 25 (22 541) - 5 455 16 607 owners of the Exchange, recognised directly in equity Balance at 8 491 108 117 10 058 165 336 16 607 30 June 2011 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (CONTINUED) for the six months ended 30 June 2011 Total
Exchange Investor JSE LTIS and Pro- 2010 Retained subsi- tection Total reserve earnings diaries Funds equity
Group R`000 R`000 R`000 R`000 R`000 Balance at - 903 367 1 244 910 359 814 1 604 724 31 December 2009 Total - 199 282 199 282 (8 817) 190 465 comprehensive income for the period Transactions 1 711 (163 332) (193 927) - (193 927) with owners of the Exchange, recognised directly in equity Balance at 1 711 939 317 1 250 265 350 997 1 601 262 30 June 2010 (reviewed) Balance at - 903 367 1 244 910 359 814 1 604 724 31 December 2009 Total - 348 373 348 373 27 401 375 774 comprehensive income for the year Transactions 6 244 (107 790) (134 026) (55 368) (189 394) with owners of the Exchange, recognised directly in equity Balance at 6 244 1 143 950 1 459 257 331 847 1 791 104 31 December 2010 Total - 243 280 243 280 (387) 242 893 comprehensive income for the year Transactions 6 050 (174 871) (169 275) (1 463) (170 738) with owners of the Exchange, recognised directly in equity Balance at 12 294 1 212 359 1 533 262 329 997 1 863 259 30 June 2011 CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION as at 30 June 2011 JSE Group
As at As at As at 30 June 30 June 31 Dec 2011 2010 2010 (reviewed) (reviewed) (audited)
R`000 R`000 R`000 Assets Non-current assets 990 011 918 730 943 010 Property and equipment 130 113 84 222 113 272 Intangible assets 478 868 439 009 423 039 Investments in equity accounted 83 946 82 795 95 017 investees Other investments 212 227 228 701 218 034 Derivative financial instruments 814 2 520 3 015 Due from JSE Empowerment Fund Trust 14 294 13 315 13 910 Deferred taxation 69 749 68 168 76 723 Current assets 16 703 969 16 184 162 16 223 383 Trade and other receivables 213 977 172 928 187 379 Income tax receivable 76 875 34 064 61 783 Amounts due from related parties 5 333 1 763 - Margin and collateral deposits 15 402 135 15 069 020 14 927 891 Cash and cash equivalents 1 005 649 906 387 1 046 330 Total assets 17 693 980 17 102 892 17 166 393 Equity and liabilities Total equity 1 863 259 1 601 262 1 791 104 Non-current liabilities 151 838 204 965 170 630 Finance lease 340 2 046 1 279 Employee benefits 34 559 75 241 46 105 Deferred taxation 3 935 5 380 4 757 Operating lease liability 60 366 71 857 65 562 Deferred income 51 530 49 391 51 847 Due to SAFEX members 1 108 1 050 1 080 Current liabilities 15 678 883 15 296 665 15 204 659 Trade and other payables 189 540 169 097 174 155 Employee benefits 75 203 53 106 94 113 Operating lease liability 12 006 5 442 8 500 Due to group entities - - - Margin and collateral deposits 15 402 134 15 069 020 14 927 891 Total equity and liabilities 17 693 980 17 102 892 17 166 393 CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION (CONTINUED) as at 30 June 2011 Investor Protection Funds As at As at As at 30 June 30 June 31 Dec 2011 2010 2010
(reviewed) (reviewed) (audited) R`000 R`000 R`000 Assets Non-current assets 212 224 228 698 218 032 Property and equipment - - - Intangible assets - - - Investments in equity accounted - - - investees Other investments 212 224 228 698 218 032 Derivative financial instruments - - - Due from JSE Empowerment Fund Trust - - - Deferred taxation - - - Current assets 118 169 119 002 116 075 Trade and other receivables 603 719 4 035 Income tax receivable - - - Amounts due from related parties - - - Margin and collateral deposits - - - Cash and cash equivalents 117 566 118 283 112 040 Total assets 330 393 347 700 334 107 Equity and liabilities Total equity 329 812 347 049 331 847 Non-current liabilities - - - Finance lease - - - Employee benefits - - - Deferred taxation - - - Operating lease liability - - - Deferred income - - - Due to SAFEX members - - - Current liabilities 581 651 2 260 Trade and other payables 301 324 581 Employee benefits - - - Operating lease liability - - - Due to group entities 280 327 1 679 Margin and collateral deposits - - - Total equity and liabilities 330 393 347 700 334 107 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS for the six months ended 30 June 2011 JSE Group Six months ended Year ended 30 June 30 June 31 Dec
2011 2010 2010 (reviewed) (reviewed) (audited) R`000 R`000 R`000 Net cash inflow/(outflow) from 232 640 216 871 419 960 operating activities Net cash (used in)/from investing (69 993) (65 976) (95 993) activities Net cash used in financing (201 284) (165 305) (195 637) activities Net (decrease)/increase in cash and (38 637) (14 410) 128 330 cash equivalents Cash and cash equivalents at 1 046 330 920 797 920 796 beginning of period Effect of exchange rate (2 044) - (2 796) fluctuations on cash held Cash and cash equivalents at end of 1 005 649 906 387 1 046 330 period CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS (CONTINUED) for the six months ended 30 June 2011 Investor Protection Funds
Six months ended Year ended 30 June 30 June 31 Dec 2011 2010 2010 (reviewed) (reviewed) (audited)
R`000 R`000 R`000 Net cash inflow/(outflow) from 3 502 1 037 (1 793) operating activities Net cash (used in)/from investing 3 487 2 972 51 163 activities Net cash used in financing (1 463) (1 836) (53 440) activities Net (decrease)/increase in cash and 5 526 2 173 (4 070) cash equivalents Cash and cash equivalents at 112 040 116 110 116 110 beginning of period Effect of exchange rate - - - fluctuations on cash held Cash and cash equivalents at end of 117 566 118 283 112 040 period NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the six months ended 30 June 2010 1. Reporting entity# JSE Limited (the "Company", the "JSE" or the "Exchange") is a company domiciled in the Republic of South Africa. The condensed consolidated interim financial statements of the Company as at and for the six months ended 30 June 2011 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group`s interests in associates. The JSE is licensed as an exchange in terms of the Securities Services Act, No 36 of 2004. The Group currently consists of the Company, its subsidiary companies (Safex Clearing Company (Pty) Limited, JSE Trustees (Pty) Limited, BESA Limited, BESA Investments (Pty) Limited and BondClear Limited), special purpose entities JSE Guarantee Fund Trust, JSE Derivatives Fidelity Fund Trust and BESA Guarantee Fund Trust and its interests in associated companies (Strate Limited and Indexco Managers Limited). 2. Statement of compliance# These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34, Interim Financial Reporting and the AC 500 series pronouncements issued by the Accounting Practices Board of SAICA as well as Section 29(e) of the Companies Act (No 71 of 2008). They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2010. These condensed consolidated interim financial statements were approved by the Board of Directors on 16 August 2011. 3. Significant accounting policies# Change in accounting policies The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2010. 4. Comparative figures# Unless otherwise indicated, comparative figures refer to the six months ended 30 June 2010. 5. Operating segments# Information about reportable segments Equity1 Equity and Commodity Interest Currency derivatives rate
derivatives market2 R`000 R`000 R`000 R`000 R`000 For the period ended 30 June 2011 External revenues 418 665 63 127 23 578 25 761 For the period ended 30 June 2010 External revenues 387 650 58 354 20 573 23 411 For the period ended 31 December 2010 External revenues 772 885 116 077 47 827 47 745 Information about reportable segments Infor- mation Other3 Total
sales R`000 R`000 R`000 For the period ended 30 June 2011 External revenues 61 141 75 676 667 948 For the period ended 30 June 2010 External revenues 58 703 74 610 623 301 For the period ended 31 December 2010 External revenues 116 727 153 887 1 255 148 1 Comprises equities trading fees, risk management, clearing and settlement fees, membership fees, issuer services and back-office services (BDA). 2 The interest rate market revenue was remeasured to include R6.7 million (2010: R7.0 million) of listing fees relating to the bond market. 3 Comprises Funds management and Strate ad valorem fees. 6. Long-term incentive scheme 2010 ("LTIS 2010")# LTIS 2010 is a long-term incentive scheme, designed to incentivise and retain selected senior employees of the JSE over rolling three- and four- year time horizons. All shares awarded under LTIS 2010 are held in trust and are restricted until all vesting conditions are fulfilled. Where a participant leaves the employ of the JSE prior to the vesting dates or the relevant JSE corporate performance metrics are not achieved, the share awards are forfeited. During May 2011 the Board approved the second annual allocation under the rules of the scheme, and granted authority for the LTIS 2010 Trust to acquire the requisite number of JSE shares in the open market for allocation to selected senior staff. All individual allocations were accepted by scheme participants on or about 30 May 2011. The following assumptions, using Black-Scholes valuation methodology, were used to calculate the share-based payment value charge of R0.7 million in respect of Allocation 2. Retention shares Performance shares Base price (Rand per share) 67.44 67.44 Total number of shares granted 317 500 109 400 Grant date 1 May 10 30 Jun 10 Dividend yield 3.00% 3.00% Vesting dates: 50% of the shares awarded vest 158 750 54 700 after three years 50% of the shares awarded vest 158 750 54 700 after four years Members of the JSE`s executive committee, which includes the executive directors and Company Secretary, have been granted a total of 109 400 retention shares and 109 400 performance shares under Allocation 2. The share-based payment charge for the period in respect of Allocation 1 (granted in May 2010) amounts to R5.4 million. 7. Revenue# Six months ended Year ended 30 June 30 June 31 December 2011 2010 2010 (reviewed) (reviewed) (audited)
R`000 R`000 R`000 Equities trading fees 172 637 164 826 324 576 Risk management, 102 305 92 895 188 943 clearing and settlement fees Back-office services 96 590 86 753 177 518 (BDA) Issuer services 48 798 45 830 85 591 Membership fees 5 055 4 367 8 896 Equity derivatives fees 55 880 53 336 105 950 Currency derivatives 7 247 5 018 10 127 Commodity derivatives 23 578 20 573 47 827 fees Interest rate market 19 041 16 390 35 106 Information sales 61 141 58 703 116 727 Funds management 22 627 22 454 46 326 Total revenue before 614 899 571 145 1 147 587 Strate ad valorem fees Strate ad valorem fees 53 049 52 156 107 561 Total revenue 667 948 623 301 1 255 148 8. Headline and diluted headline earnings per share# Six months ended Year ended
30 June 30 June 31 December 2011 2010 2010 (reviewed) (reviewed) (audited) R`000 R`000 R`000
Reconciliation of headline earnings: Profit for the period 253 825 207 559 378 007 attributable to ordinary shareholders Adjustments are made to the following: (Profit)/loss on (8) 15 12 disposal of property and equipment Impairment of intangible - - 23 889 assets Net realised gains on (8 612) (9 229) (31 893) disposal of available- for-sale financial assets Headline earnings 245 205 198 345 370 015 Headline earnings per 288.9 233.3 436.1 share (cents) Diluted headline earnings per share Headline earnings 245 205 198 345 370 015 Weighted average number 86 223 545 86 332 465 86 215 531 of ordinary shares (diluted) Diluted headline 284.4 229.7 429.2 earnings per share (cents) 9. Black shareholders` retention scheme# During June 2011, the options issued in terms of the Black Shareholder Retention Scheme implemented during 2006 were exercised by qualifying black shareholders. In addition 156 536 options that had lapsed under this scheme were reissued to the JSE Empowerment Fund (JEF) at a cost of R7.9 million to profit or loss. The issue and allotment of the resulting shares to JEF and some qualifying black shareholders took place after the reporting date and has been reflected as shares pending allocation in equity. 10. Contingent liabilities and commitments# There were no changes to the contingent liabilities and commitments reported in the consolidated financial statements as at and for the year ended 31 December 2010 except as noted below. 10.1 Commitments As at 30 June 2011 the JSE had capital commitments of R28.0 million for the purchase of assets relating to the data centre and USD0.6 million for the replacement of the equities trading platform. 11. Events after reporting date# On 1 July 2011, the Group acquired the business of Momentum Managed Account Platform (Proprietary) Limited ("MOMMAP"), a hedge fund platform, as a going concern and the entire issued share capital of Momentum Managed Account Platform Holdings (Proprietary) Limited for a purchase consideration of R27 499 999 and R1 respectively. This purchase consideration will be funded from a portion of the cash flows generated by the platform. MOMMAP will also be party to certain en commandite partnership agreements, effective from 1 July 2011. The platform will offer hedge fund investors greater protection by segregating investors` assets from the hedge fund manager and monitoring hedge funds` trading activity, thereby ensuring that the funds remain within the agreed investment mandates. The MOMMAP assets acquired comprise mainly intellectual property and a staff complement. The carrying amount attributable to the assets and liabilities within the business of MOMMAP at the acquisition date was insignificant. The fair value attributable to the acquired identifiable assets and goodwill cannot be reliably determined at the reporting date, 30 June 2011. The financial effects of the above transaction have not been brought to account at 30 June 2011. The operating results and assets and liabilities of the Company will be brought to account from 1 July 2011. Review conclusion KPMG Inc., the Company`s independent auditor, has reviewed the condensed consolidated interim financial statements contained in this interim report and has expressed an unmodified conclusion on the condensed consolidated interim financial statements. Their review report is available for inspection at the Company`s registered office. The condensed consolidated financial results include the consolidated statement of financial position at 30 June 2011, the consolidated statement of comprehensive income and the condensed consolidated statements of changes in equity and cash flows for the six months then ended and selected explanatory notes. Selected explanatory notes are marked with a #. JOHANNESBURG STOCK EXCHANGE 1 Exchange Square, 2 Gwen Lane, Sandown, South Africa. Private Bag X991174, Sandton 2146, South Africa, Sandown Tel +27 11 520 7000 Fax +27 11 520 8584 Sponsor: RAND MERCHANT BANK (a division of FirstRand Bank Limited) A full version of this announcement can be found at www.jse.co.za Date: 16/08/2011 15:25:26 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.

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