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Abridged Audited Results for Property Index Tracker Collective Investment Scheme (“Proptrax Ten”) for the year ended
PropTrax TEN
Share code: PTXTEN ISIN: ZAE000155362
("PropTrax TEN")
A portfolio in the Property Index Tracker Collective Investment Scheme registered as such in terms of the
Collective Investment Schemes Control Act, 45 of 2002, managed by Property Index Tracker Managers
(Proprietary) Limited
ABRIDGED AUDITED RESULTS FOR PROPERTY INDEX TRACKER COLLECTIVE INVESTMENT
SCHEME (“PROPTRAX TEN”) FOR THE YEAR ENDED 30 JUNE 2013
STATEMENT OF FINANCIAL POSITION
as at 30 June 2013
2013 2012
R R
ASSETS
Current assets
Listed investments held at fair value 139 992 892 47 635 602
Trade and other receivables - 319 837
Cash and cash equivalents 1 559 766 372 898
Total assets 141 552 658 48 328 337
EQUITY AND LIABILITIES
Current liabilities
Net assets attributable to investors 141 318 072 48 242 211
Trade and other payables 234 586 86 126
Total equity and liabilities 141 552 658 48 328 337
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2013
2013 2012
R R
Distribution income 6 097 503 2 180 048
Interest income 20 601 8 498
Investment income 6 118 104 2 188 546
Management and administration expenses (736 725) (250 592)
Income available for distribution 5 381 379 1 937 954
Distributions paid (4 969 427) (1 628 982)
Change in net assets attributable to investors 411 952 308 972
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STATEMENT OF CHANGES IN NET ASSET VALUE ATTRIBUTABLE TO INVESTORS
for the year ended 30 June 2013
Capital Income
attributable attributable
to
to investors Total
investors
R R R
Balance at 30 June 2011 21 983 584 303 699 22 287 283
400 000 units created on 20 February 2012 4 886 851 4 886 851
400 000 units created on 3 April 2012 4 896 649 4 896 649
500 000 units created on 13 April 2012 6 050 184 6 050 184
400 000 units created on 17 May 2012 4 949 129 4 949 129
Change in net assets attributable to investors 4 863 143 308 972 5 172 115
Balance at 30 June 2012 47 629 540 612 671 48 242 211
1 000 000 units created on 25 July 2012 13 887 019 13 887 019
200 000 units created on 28 August 2012 2 901 540 2 901 540
200 000 units created on 11 September 2012 2 800 252 2 800 252
200 000 units created on 24 October 2012 2 800 318 2 800 318
200 000 units created on 7 November 2012 2 689 320 2 689 320
500 000 units created on 9 November 2012 6 815 037 6 815 037
200 000 units created on 15 November 2012 2 765 019 2 765 019
100 000 units created on 24 December 2012 1 415 784 1 415 784
200 000 units created on 27 December 2012 2 837 789 2 837 789
200 000 units created on 11 January 2013 2 872 357 2 872 357
100 000 units created on 15 January 2013 1 445 901 1 445 901
500 000 units created on 24 January 2013 7 327 316 7 327 316
300 000 units created on 14 February 2013 4 349 532 4 349 532
100 000 units created on 5 March 2013 1 479 214 1 479 214
200 000 units created on 2 May 2013 3 239 512 3 239 512
100 000 units created on 7 May 2013 1 655 721 1 655 721
500 000 units created on 9 May 2013 8 305 047 8 305 047
200 000 units created on 10 May 2013 3 303 388 3 303 388
100 000 units created on 17 May 2013 1 649 618 1 649 618
300 000 units created on 20 May 2013 4 976 954 4 976 954
200 000 units created on 31 May 2013 2 926 046 2 926 046
200 000 units created on 7 June 2013 2 926 138 2 926 138
Change in net assets attributable to investors 6 973 176 411 952 7 385 128
Cumulative distributions received on units created 321 911 321 911
Balance at 30 June 2013 139 971 538 1 346 534 141 318 072
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STATEMENT OF CASH FLOWS
for the year ended 30 June 2013
2013 2012
R R
Cash flows from operating activities
Cash utilised by operations (588 265) (177 524)
Distribution income 6 417 340 2 018 997
Interest income 20 601 8 498
Cash distributed to investors (4 647 516) (1 628 982)
Cash inflow from operating activities 1 202 160 220 989
Cash flows from investing activities
Purchase of equities (97 841 747) (24 821 667)
Proceeds from sale of equities 12 457 633 4 033 819
Cash outflow from investing activities (85 384 114) (20 787 848)
Cash flows from financing activities
Creation of securities 85 368 822 20 782 813
Cash inflow from financing activities 85 368 822 20 782 813
Net increase in cash and cash equivalents 1 186 868 215 954
Cash and cash equivalents at beginning of year 372 898 156 944
Cash and cash equivalents at end of year 1 559 766 372 898
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NOTES TO THE ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2013
1. ACCOUNTING POLICIES
1.1 Reporting entity
Property Index Tracker Collective Investment Scheme Ten (“PropTrax Ten Fund”) is a collective
investment scheme in securities established in South Africa in terms of the Collective Investment
Schemes Control Act, 45 of 2002.
1.2 Basis of preparation
Basis of measurements
The financial statements are prepared on a historic cost basis, except for financial instruments,
which are accounted for as set out in note 1.5.
Statement of compliance
The financial statements are prepared in accordance with International Financial Reporting
Standards ("IFRS"), its interpretations adopted by the International Accounting Standards Board
("IASB"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council,
the JSE Listings Requirements, the requirements of the Trust Deed and the Collective Investment
Schemes Control Act, 45 of 2002.
1.3 Functional and reporting currency
The financial statements are presented in Rands which is the functional currency of the Scheme.
1.4 Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates, judgements and assumptions that affect the reported amounts. It also
requires management to exercise its judgement in the Scheme's process of applying the
accounting policies. Actual results may vary from these estimates. There are no areas involving a
higher degree of judgement of complexities or areas where assumptions or estimates are
significant.
The principal accounting policies applied in the preparation of these financial statements are set
out below.
1.5 Financial instruments
Measurement
Financial instruments are recognised when, and only when, the PropTrax Ten Fund becomes a
party to the contractual provisions of that particular instrument. Financial instruments are initially
measured at fair value, which except for financial instruments not at fair value through profit and
loss, include direct attributable transaction costs. Subsequent to initial recognition, these
instruments are measured as set out below.
Investments
Listed investments are measured at fair value. Fair value is determined with reference to quoted
market prices at the reporting date, as published in the financial press at the reporting date.
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Trade and other receivables
Trade and other receivables originated by the PropTrax Ten Fund are measured at amortised cost
using the effective interest method, less impairment losses. Trade and other receivables are short
term in nature.
Cash and cash equivalents
Cash and cash equivalents are measured at fair value.
Financial liabilities
Financial liabilities, other than those held at fair value through profit or loss, are measured at
amortised costs using the effective interest rate method. Financial liabilities arising from the
securities issued by the PropTrax Ten Fund are carried at the fair value representing the investor's
right to a residual interest in the PropTrax Ten Fund's net assets, i.e. the net asset value of the
Scheme.
Fair value gains and losses on subsequent measurement
Unrealised gains and losses arising from a change in the fair value of financial instruments are
included in statement of net assets attributable to investors.
Offset
Financial assets and financial liabilities are offset and the net amount reported in the statement of
financial position when the PropTrax Ten Fund has a legally enforceable right to set off the
recognised amounts, and intends to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Derecognition of financial instruments
The PropTrax Ten Fund derecognises financial assets when and only when:
- The contractual rights to the cash flows arising from the financial assets have expired or have
been forfeited by the Proptrax Ten Fund; or
- It transfers the financial assets including substantially all the risks and rewards of ownership of
the assets; or
- It transfers the financial assets, neither retaining nor transferring substantially all the risks and
rewards of the ownership of the asset, but no longer retains control of the asset.
A financial liability is derecognised when and only when the liability is extinguished, this is, when
the obligation specified in the contract is discharged, cancelled or has expired.
The difference between the carrying amount of a financial liability (or part thereof) extinguished or
transferred to another party and consideration paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss.
1.6 Revenue
Revenue comprises income from securities lending activities and investment income.
Securities lending fee income
The fees earned for the administration of securities lending activities are accounted for on an
accrual basis in the year in which the service is rendered. Assets subject to securities lending are
not derecognised.
Investment income
Interest income is recognised in the statement of comprehensive income, using the effective rate
method taking into account the expected timing and amount of cash flows.
Distribution income in the form of cash and manufactured dividends are recognised when the right
to receive payment is established. Manufactured dividends received are recognised as income in
profit or loss.
1.7 Income tax
Under the current system of taxation in South Africa, the PropTrax Ten Fund is exempt from paying
tax on income or capital gains. Both income and capital gains are taxed in the hands of investors.
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1.8 Expenses
Expenses are recognised on the accrual basis.
1.9 Impairment
Financial assets that are stated at amortised cost are reviewed at each reporting date to determine
whether there is objective evidence of impairment. If any such indication exists, an impairment loss
is recognised in profit or loss as the difference between the asset's carrying amount and the
present value of estimated future cash flows discounted at the financial asset's original effective
interest rate. If in a subsequent period the amount of an impairment loss recognised on a financial
asset carried at amortised cost decreases and the decrease can be linked objectively to an event
occurring after the write-down the impairment loss is reversed through profit or loss.
1.10 Securities lending
The portfolio engages in securities lending activities up to 50% of the assets under management.
Collateral is held by the relevant lending desks.
1.11 Distributions
Distributions payable on redeemable units are recognised in profit or loss as distributions.
In accordance with the PropTrax Ten Deed, the Portfolio distributes its distributable income and
any other amounts determined by the PropTrax Managers, to security holders in cash. The
distributions are payable shortly after the end of each quarter and are recognised in the statement
of comprehensive income as distributions.
1.12 Creations and redemptions
Investors can acquire PropTrax Ten securities by trading on the JSE. These purchases will be
made at the current market price of the securities plus a brokerage fee that is negotiable with the
broker and any additional transaction costs applicable to such a trade.
The cash subscription price and number of PropTrax Ten securities to be issued to an investor for
cash will be determined by the amount which the investor invests (net of transaction costs) and will
be a function of the pro rata cost to the portfolio of acquiring the underlying basket of securities.
Investors subscribing for PropTrax Ten securities, by the delivery of one or more full baskets of
constituent securities, are obliged to deliver securities with a perfect match to the index.
Investors may sell securities by trading on the JSE.
Securities prices are determined by reference to the net assets of the Portfolio divided by the
number of securities in issue. For unit pricing purposes, net assets are determined using the last
reported trade price for securities. These prices may differ from the market price quoted on the
JSE.
1.13 Redeemable securities
All redeemable securities issued by the Scheme provide investors with the right to require
redemption for cash or in specie at the value proportionate to the investors' share. Such
instruments give rise to a financial liability for the net asset value of the redemption amount in the
PropTrax Ten Fund's net assets at redemption date. In accordance with the PropTrax Ten Deed
and the Act, the PropTrax Ten Fund is contractually obliged to redeem securities at the net asset
value. A redemption fee, depending on the size of the recall, would be payable by the investor
making the redemption.
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1.14 Net assets attributable to security holders
Securities are redeemable at the security holder's option and are therefore classified as financial
liabilities. The securities may be sold back to the Portfolio at any time. The fair value of redeemable
securities is measured at the redemption amount that is payable (in cash and securities
representing each investor's equal, undivided and vested interest in the assets as a whole, subject
to liabilities, as defined by the Portfolio's Trust Deed) at the reporting date if security holders
exercise their right to put the securities back to the Portfolio.
1.15 Increase/decrease in net assets attributable to security holders
Income not distributed is included in net assets attributable to security holders.
The auditors Deloitte & Touche, have audited the financial information set out in this announcement.
Their unmodified audit report is available for inspection at the Manager's registered address.
The full financial statements are available on www.proptrax.co.za.
30 September 2013
Sponsor
Grindrod Bank Limited
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