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Audited abridged annual results and cash dividend declaration for the twelve months ended 31 December 2013
JSE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2005/022939/06)
Share code: JSE ISIN code: ZAE000007911
AUDITED ABRIDGED ANNUAL RESULTS AND CASH DIVIDEND DECLARATION
FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2013
The JSE Limited ("JSE" or "Group") delivered a very pleasing corporate performance during 2013, underpinned by strong financial results.
This performance resulted from an improvement in financial market sentiment as well as the hard work of all the Group's teams, which directly
influenced revenue lines and maintained cost control. Most divisions performed well, with standout revenue performance from the Equity Market,
Post-Trade Services and Market Data divisions.
RESPONSIBILITY FOR ABRIDGED ANNUAL RESULTS
The preparation of these abridged annual results has been supervised by the chief financial officer, Aarti Takoordeen CA(SA) in terms
of section 29(1)(e) of the Companies Act.
The directors take full responsibility for the preparation of this abridged report and warrant that the financial information has been correctly
extracted from the underlying annual financial statements.
FINANCIAL REVIEW
Group earnings after tax for 2013 increased by 68% to a high
of R507 million (2012: R302 million). This follows strong operating
revenue growth from most of our products and services and tightly
controlled operating costs (up 5% to R1.08 billion;
2012: R1.03 billion).
Group earnings before interest and tax (EBIT) increased by 42%
(2012: 7%) to R578 million (2012: R406 million).The earnings
per share (EPS) and headline earnings per share (HEPS) statistics
are also pleasing at 592 cents (up 68%) and 645 cents (up 36%)
respectively, despite the impact of the impairment of legacy
technology (2013: R48 million; 2012: R75 million) and net of the
rebate to Equity Market clients of R84 million.
Personnel, technology and technology related costs (depreciation)
are the principal components of our cost base. These account for
64% of our largely fixed cost base.
Staff costs increased by R45 million (12%) to R405 million following a
flat headcount, annual salary increases of R17 million (6%),
a reduction of R18 million in the amount of staff costs capitalised
and a larger bonus pool following significantly better financial results
than in 2012. These,together with the IFRS impact of all the LTIS allocations
since 2010 resulted in the total personnel expenses, as reported, increasing to
R427 million (2012: R354 million).
Other expenses declined by 3% to R650 million (2012: R672 million).
This includes an amount of R48 million following the impairment of the
last portion of the software developed to replace our back office
accounting system once we had concluded that it was unlikely to
be brought into use as intended. Technology costs were up 19%
(reflecting the work on T+3 Phase 1) and depreciation charges were
up 8% (reflecting the first full year of depreciation of the equity
trading engine solution, implemented in mid-2012).
Keeping the cost base under control demands ongoing attention.
Over the past four years, other expenses have increased 7%
(excluding impairments) annually, a positive reflection of these
efforts. Management remains committed to keeping the business at
an optimum size from an operational perspective and to enable it to
take advantage of opportunities for new business growth.
The stronger-than-expected revenues and tight expenditure
management have translated into strong cash flow, with a net
increase in cash of R250 million for 2013 (2012: R88 million).
At year-end, our cash and cash equivalents stood at R1.38bn
(2012: R1.1bn), net of our R100 million contribution to the Safcom
Default Fund (represented in the JSE balance sheet) and third party
capital expenditure of R81 million. We have almost no debt, bar a
loan (balance of R19 million) used to fund the 2011 acquisition of the
Nautilus Managed Account Platform (2012: R23.7 million).
Ongoing investment in the business remains crucial. Looking forward
to 2014, our capital expenditure programme for business-as-usual
activities amounts to about R21 million.
A series of other strategic and technology investments remains
under consideration by executive management and the Board. Such investments
must, of course, contribute to the future profitability of the Group.
The capital expenditure for these 2014 investments is projected at about
R170 million.
CHANGES TO DIRECTORATE
During the year under review, Aarti Takoordeen, who joined the JSE
on 1 February 2013 as the new CFO, was appointed to the JSE Board
as an executive director with effect from 12 March 2013.
Shareholders approved the appointments of Mantsika Matooane and
Nomavuso Mnxasana at the annual general meeting (AGM) on 25 April 2013.
DECLARATION OF ORDINARY AND SPECIAL DIVIDEND
There is increased global attention on the capitalisation of key market
infrastructures such as exchanges and clearing houses. In this context,
the Board believes that it is appropriately capitalised, given the nature
of the risks faced by the Group. Although the Board has decided not to
retain additional capital at this time, the Group may, in due course, require
a further capital injection to meet regulatory capital requirements.
The Board has decided to declare both an ordinary and a special
dividend for the year ended December 2013 at 350 cents (2012: 250)
and 50 cents per ordinary share, respectively.
The directors have declared the following.
Annual
gross Withholding Net
Dividend amount tax % amount
Ordinary 350 15% 297.5
Special 50 15% 42.5
400 - 340
The dividend has been declared from retained earnings and no
secondary tax on companies (STC) credits are available for use. A
dividend withholding tax of 15% will be applicable to all shareholders
who are not exempt. The dividends are payable to shareholders
recorded in the register of members of the Company at the close of
business on Friday, 30 May 2014.
In compliance with the Companies Act, the directors of the JSE
confirm that the Company will satisfy the solvency and liquidity
test immediately after completion of the dividend distribution. The
dividend will be noted at the AGM to be held on Thursday, 8 May
2014. In compliance with the requirements of Strate, the following
salient dates for the payment of the dividend are applicable:
Share certificates may not be dematerialised or rematerialised
from Monday, 26 May 2014, to Friday, 30 May 2014, both days
inclusive. On Monday, 2 June 2014, the dividend will be electronically
transferred to the bank accounts of certificated shareholders who use
this facility. In respect of those who do not use this facility, cheques
dated 2 June 2014 will be posted on or about that date. The accounts
of those shareholders who have dematerialised their shares (which
are held at their central securities depository participant or broker)
will be credited on Monday, 2 June 2014. The issued share capital
of the Company as at the declaration date was 86 877 600. The tax
number of the Company is 9313008840.
Ordinary dividend paid in year: 2014 2013
In respect of financial year ended 31 Dec 2013 31 Dec 2012
Dividend per share (cents) (350 + 50 = 400 for 2013) 400 250
Rand value R348 million R217 million
Declaration date Tue, 11 March 2014 12 March 2013
Last date to trade JSE shares cum dividend Fri, 23 May 2014 17 May 2013
JSE shares commence trading ex-dividend Mon, 26 May 2014 20 May 2013
Record date for purposes of determining the registered
holders of JSE shares to participate
in the dividend at close of business on Fri, 30 May 2014 24 May 2013
Date of payment of dividend Mon, 2 June 2014 27 May 2013
PROSPECTS
The JSE is a largely fixed cost business. Costs are tightly controlled
and the necessary capital investments are made in areas that
will enhance the Group's sustainability. The Group's revenues are
variable and largely driven by activity on the various markets the
Group operates. For this reason, the Board makes no projections
regarding the Group's financial performance in 2014.
However, the JSE team is excited by the opportunities ahead as the
Group continues to make good progress towards delivering on its
2017 strategic vision. The Board is confident that, as these efforts
advance, the JSE will increasingly be positioned as a growing,
formidable and sustainable business.
Humphrey Borkum Nicky Newton-King
JSE Chairman Chief Executive Officer
APPRECIATION
As we tackle 2014, I want to pay tribute to the enormous contribution
to the evolution of the JSE made by our Chairman, Humphrey
Borkum, who retires at our AGM after five decades in the industry
and 12 years as the JSE's Chairman. Humphrey's wise counsel, always
well informed and always quietly offered, has had a major impact on
the architecture of the JSE as we know it today. Humphrey and his wife
Cheryl have been passionate and active supporters of all we do and I
know my team at the JSE joins me in thanking them for that support and
in wishing them many long and happy years ahead.
As we say goodbye to Humphrey, we welcome Nonkululeto Nyembezi-Heita, who
joined the Board in 2009 after the Group's acquisition of the Bond Exchange
of SA and who will assume the Chairmanship of the JSE after our AGM on 8 May 2014.
Nicky Newton-King
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2013
Group
Notes 2013 2012
R'000 R'000
Revenue 9 1 577 552 1 384 867
Other income 76 587 46 923
Personnel expenses (426 678) (353 896)
Other expenses 11 (649 779) (672 319)
Profit from operating activities 577 682 405 575
Finance income 992 304 861 474
Finance costs (874 236) (781 092)
Net finance income 118 068 80 382
Share of profit of equity-accounted investees (net of income tax) 39 788 35 056
Profit before income tax 735 538 521 013
Income tax expense 12 (228 910) (218 902)
Profit for the year 506 628 302 111
Other comprehensive income
Net change in fair value of available-for-sale financial assets 49 987 41 323
Net change in fair value of available-for-sale financial assets reclassified to profit or loss (15 875) (11 834)
Income tax on other comprehensive income - -
Other comprehensive income for the year, net of income tax 34 112 29 489
Total comprehensive income for the year 540 740 331 600
Earnings per share
Basic earnings per share (cents) 13.1 592.1 351.8
Diluted earnings per share (cents) 13.2 588.6 349.5
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2013
Group
2013 2012
R'000 R'000
Assets
Non-current assets 868 074 900 862
Property and equipment 162 171 164 164
Intangible assets 259 178 314 790
Investments in equity-accounted investees 142 169 119 904
Investments in subsidiaries - -
Other investments 248 786 215 059
Loan to the JSE Empowerment Fund Trust 14 022 14 003
Deferred taxation 41 748 72 942
Current assets 20 507 267 16 177 565
Trade and other receivables 216 692 194 248
Income tax receivable 17 108 16 574
Due from Group entities - -
Safcom Default Fund collateral deposit 516 870 -
Margin deposits 18 335 464 14 834 408
Collateral deposits 42 181 3 559
Cash and cash equivalents 1 378 952 1 128 776
Total assets 21 375 341 17 078 427
Equity and liabilities
Total equity 2 188 466 1 871 021
Share capital 8 533 8 571
Share premium 84 671 102 858
Reserves 431 075 368 902
Retained earnings 1 664 187 1 390 690
Non-current liabilities 120 841 120 406
Finance leases 11 352 -
Borrowings 19 055 23 715
Employee benefits - 5 128
Deferred taxation 12 324 4 946
Operating lease liability 57 807 36 985
Deferred income 20 303 49 632
Current liabilities 19 066 034 15 087 000
Trade and other payables 214 541 163 027
Due to Safex members 1 286 1 190
Employee benefits 62 534 67 860
Operating lease liability 28 16 956
Due to Group entities - -
Safcom Default Fund contributions 410 000 -
Margin deposits 18 335 464 14 834 408
Collateral deposits 42 181 3 559
Total equity and liabilities 21 375 341 17 078 427
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2013
JSE
Total LTIS
Share Share Share BBBEE 2010 Total Retained Total
Capital premium Capital NDR reserve reserve reserves income equity
Group R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 January 2012 8 605 129 642 138 247 292 593 165 336 18 434 476 363 1 154 458 1 769 068
Profit for the year - - - - - - - 302 111 302 111
Other comprehensive income - - - 29 489 - - 29 489 - 29 489
Total comprehensive income for the year - - - 29 489 - - 29 489 302 111 331 600
Treasury shares (37) (28 808) (28 845) - - - - - (28 845)
Treasury shares - share issue costs - (70) (70) - - - - - (70)
Sale of treasury shares 3 2 094 2 097 - - - - - 2 097
Transfer of BBBEE reserve to retained earnings - - - - (165 336) - (165 336) 165 336 -
Transfer of profits from Investor Protection Fund - - - 16 967 - - 16 967 (16 967) -
Equity-settled share-based payment - - - - - 14 285 14 285 - 14 285
Distribution from BESA Guarantee Fund Trust - - - (2 866) - - (2 866) 2 866 -
Dividends - - - - - - - (217 114) (217 114)
Total contributions by and distribution to owners of
Company recognised directly in equity (34) (26 784) (26 818) 14 101 (165 336) 14 285 (136 950) (65 879) (229 647)
Balance at 1 January 2013 8 571 102 858 111 429 336 183 - 32 719 368 902 1 390 690 1 871 021
Profit for the year - - - - - - - 506 628 506 628
Other comprehensive income - - - 34 112 - - 34 112 - 34 112
Total comprehensive income for the year - - - 34 112 - - 34 112 506 628 540 740
Treasury shares (46) (35 117) (35 163) - - - - - (35 163)
Treasury shares - share issue costs - (104) (104) - - - - - (104)
Sale of treasury shares 8 5 926 5 934 - - - - - 5 934
Allocation 1 shares vested - 11 108 11 108 - - (11 108) (11 108) - -
Transfer of profits from Investor Protection Fund - - - 18 797 - - 18 797 (18 797) -
Equity-settled share-based payment - - - - - 23 129 23 129 - 23 129
Distribution from BESA Guarantee Fund Trust - - - (2 757) - - (2 757) 2 757 -
Dividends - - - - - - - (217 091) (217 091)
Total contributions by and distributions to owners of
Company recognised directly in equity (38) (18 187) (18 225) 16 040 - 12 021 28 061 (233 131) (223 295)
Balance at 31 December 2013 8 533 84 671 93 204 386 335 - 44 740 431 075 1 664 187 2 188 466
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2013
Group
2013 2012
R'000 R'000
Cash flows from operating activities
Cash generated by operations 757 971 470 403
Interest received 965 042 868 802
Interest paid (850 457) (787 867)
Dividends received 3 946 3 482
Taxation paid (190 871) (123 567)
Net cash generated by operating activities 685 631 431 253
Cash flows from investing activities
Proceeds on sale of other investments 40 935 32 309
Acquisition of other investments (24 675) (36 161)
Investment in Safcom Default Fund (516 870) -
Dividends from equity-accounted investees 17 523 15 950
Proceeds from disposal of property and equipment 172 788
Leasehold improvements (32) (188)
Acquisition of intangible assets (33 384) (74 363)
Acquisition of property and equipment (48 079) (24 143)
Net cash used in investing activities (564 410) (85 808)
Cash flows from financing activities
Distribution from/(by) Investor Protection Funds - -
Proceeds from issue of new shares - -
Proceeds from sale of treasury shares 5 919 2 097
Contributions received Safcom Default Fund 410 000 -
Borrowings repaid (4 660) (3 055)
Acquisition of treasury shares (35 252) (28 915)
Dividends paid (217 091) (217 114)
Net cash from/(used in) financing activities 158 916 (246 987)
Net increase in cash and cash equivalents 280 137 98 458
Cash and cash equivalents at 1 January 1 128 776 1 041 089
Effect of exchange rate fluctuations on cash held (29 961) (10 771)
Cash and cash equivalents at 31 December 2013 1 378 952 1 128 776
SELECTED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2013
1. Reporting entity
JSE Ltd (the "JSE", the "Company" or the "Exchange") is a company domiciled in South Africa. The registration number is 2005/022939/06. The
JSE is licensed as an exchange in terms of the Financial Markets Act, 19 of 2012. The JSE has the following main lines of business: issuer services,
trading, clearing and settlement services, technology and other technology related services and market data sales. The address of the Company's
registered office is One Exchange Square, 2 Gwen Lane, Sandown. The consolidated financial statements of the Company as at and for the year
ended 31 December 2013 comprise the Company and its subsidiaries and controlled structured entities (collectively referred to as the "Group" and
individually as "Group entities") and the Group's interest in associates. The consolidated financial statements of the Company can be inspected at
the Company's registered address or obtained from the Company at the same address.
2. Basis of preparation
Statement of compliance
The abridged consolidated annual financial statements have been prepared in accordance with IAS 34 - "Interim Financial Reporting" and the
requirements of the Companies Act of South Africa and in compliance with the JSE Listings Requirements and the accounting policies applied
conform to International Financial Reporting Standards and the SAICA Financial Reporting Guides.
3. Changes in accounting policies
Change in accounting policies
Except for the new standards adopted, all accounting policies applied by the Group in these abridged consolidated 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 2013.
The Group has adopted the following new standards with a date of initial application of 1 January 2013:
IFRS 10 Consolidated Financial Statements
The Group has changed its accounting policy for determining whether it has control over and consequently whether it consolidates its investees.
The Group reassessed its control over investees as at 1 January 2013, and can confirm IFRS 10 does not have a significant impact on the Group.
IFRS 12 Disclosure of Interests in Other Entities
As a result of IFRS 12, the Group has expanded its disclosures about its interest in subsidiaries and equity-accounted investees.
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements. The Group has applied the
new fair value measurement prospectively. This change has had no significant impact on the measurement of the Group assets and liabilities.
4. Comparative figures
Unless otherwise indicated, comparative figures refer to the twelve months ended 31 December 2012.
5. Use of estimates and judgements
The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimates are revised and in any future periods affected.
6. Financial risk management
The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at
and for the year ended 31 December 2012.
7. Operating segments
The Group has five reportable segments, as stated below. Each business unit offers different products and services and is managed separately,
because each requires different technology and a different marketing strategy. Management makes decisions based on management accounting
information, which reflects revenue by business unit and costs at a cost category level without specific allocation to business units.
Information about reportable segments
Equity and Interest
Equity1 currency Commodity rate2 Market
division derivatives derivatives market data Other3 Total
R'000 R'000 R'000 R'000 R'000 R'000 R'000
For the year ended 31 December 2013
External revenues 965 856 155 765 48 750 61 954 176 641 168 586 1 577 552
For the year ended 31 December 2012
External revenues 827 142 130 037 55 939 60 750 146 849 164 150 1 384 867
1. Comprises equities trading fees, risk management, clearing and settlement fees, membership fees, issuer regulation and back-office services (BDA).
2. Includes R16.0m (2012: R15.1m) of issuer regulation listing fees relating to the bond market.
3. Comprises funds under management and Strate ad valorem fees.
8. Share-based payments
(i) Vesting of Allocation 1 Tranche 1 shares during the period under review
The first award (Allocation 1) under LTIS 2010 was granted in May 2010 with the following vesting profile:
Tranche 1: 50% of the total award, which has now vested on 1 May 2013.
Tranche 2: 50% of the total award, vesting on 1 May 2014.
As at 31 December 2013, details of Allocation 1 were as follows:
Personal Corporate
performance performance
Tranche 1 shares shares Total
Original number of Tranche 1 shares awarded May 2010 163 700 77 750 241 450
Forfeited by bad leavers to date (26 450) (10 850) (37 300)
Forfeited by good leavers to date (1 167) (2 182) (3 349)
Accelerated for good leavers to date (1 633) (4 368) (6 001)
Forfeited for missing corporate performance targets - (27 761) (27 761)
Vested on 1 May 2013 (134 450) (32 589) (167 039)
Tranche 1 fully vested - - -
Tranche 2
Original number of Tranche 2 shares awarded May 2010 163 700 77 750 241 450
Forfeited by bad leavers to date (30 750) (10 850) (41 600)
Forfeited by good leavers to date (1 167) (2 182) (3 349)
Accelerated for good leavers to date (1 633) (4 368) (6 001)
Tranche 2 shares available for vesting in May 2014 130 150 60 350 190 500
(ii) Grant of Allocation #4 under LTIS 2010 during the period under review
On 22 June 2012, shareholders approved a special resolution authorising financial assistance to the JSE LTIS 2010 Trust for a period of
two years, for the purpose of acquiring JSE ordinary shares in the open market for allocation to selected employees in accordance with the
rules of LTIS 2010. In accordance with the terms of this resolution, the Board approved a fresh annual allocation of shares (Allocation #4) to
selected employees for the 2013 year, and these individual allocations were accepted by scheme participants by 17 May 2013. Allocation
#4 comprised a total of 457 100 JSE ordinary shares and these shares were acquired in the open market by 17 May 2013.
Personal Corporate
performance performance
shares shares
Share price at grant date (rands per ordinary share) 76.92 76.92
Total number of shares granted 328 500 128 600
Dividend yield 3.00% 3.00%
Grant date 17 May 2013 17 May 2013
Vesting dates:
50% of the shares awarded vest on 1 June 2016 164 250 64 300
50% of the shares awarded vest on 1 June 2017 164 250 64 300
Members of the JSE's executive committee, which includes the executive directors and the Company Secretary, have been granted a total
of 100 800 personal performance shares and 128 600 corporate performance shares under Allocation #4.
2013 2012
Fair value charge to profit and loss
The profit or loss charge for the period, calculated using the Black-Scholes
valuation methodology, in respect of allocations granted under LTIS 2010 is as follows:
Allocation #1 (granted in May 2010) R4.2m R5.8m
Allocation #2 (granted in May 2011) R6.2m R4.0m
Allocation #3 (granted in June 2012) R8.1m R4.2m
Allocation #4 (granted in May 2013) R4.6m Nil
R23.1m R14.0m
Group
2013 2012
R'000 R'000
9. Revenue
Equity Market fees 374 283 319 136
Post-trade services 249 224 211 902
Back-office services (BDA) 237 556 204 909
Issuer regulation 109 685 95 827
Membership fees 11 108 10 434
Equity derivatives fees 131 907 112 571
Currency derivatives fees 23 858 17 466
Commodity derivatives fees 48 750 55 939
Interest rate market fees 45 954 45 684
Market data fees 176 641 146 849
Funds under management 68 379 61 255
Total revenue before Strate ad valorem fees 1 477 345 1 281 972
Strate ad valorem fees 100 207 102 895
Total revenue 1 577 552 1 384 867
10. Personnel expenses
Although staff numbers were maintained at 2012 levels, and despite average annual salary adjustments being held at 6%, current year remuneration
increased by 12% year-on-year to R405.3m and total personnel expenditure as reflected in the audited annual financial statements rose by 21% to
R426.6m from R353.9m in 2012. This was principally owing to the following:
- An increase in the size of the overall annual bonus pool for 2013 to R93.3m. The JSE's solid financial performance for the year, with basic
earnings per share up 69%, was the principal driver of the higher bonus payments in 2013.
- A material reduction in the level of capitalised personnel expenses from R31.1m in 2012 to R13.2m in 2013.
- An increase in the charge to profit and loss in respect of the JSE's long-term incentive scheme (LTIS 2010) to R28.2m from R19.3m in 2012,
which now reflects the full cost of all allocations made since 2010.
- An increase in non-executive director emoluments to R6.3m in 2013 from R5.4m in 2012, reflecting the full-year impact of non-executive directors
appointed in 2012.
11. Other expenses
2013 2012
Other operating expenses 491 518 489 273
Impairment 48 138 75 017
Strate ad valorem fees 110 123 108 029
649 779 672 319
The impairment loss of R48m (2012: R75m) relates to the carrying value of the surveillance components of SRP. The functionality of this component
was re-assessed in light of the new integrated trading and clearing project. This software component is no longer compatible with the new
architecture and therefore the decision to impair.
12. Income tax expense
The Group's consolidated effective tax rate for the year ended 31 December 2013 was 31.12% (2012: 42.01%). The SRP impairment of R48.1m
(2012: R75.0m) was not deducted for tax purposes. The decrease in the effective tax rate for the year is owing to a smaller deferred tax impact of
R12.7m (2012: R41.2m) as a result of a decision to impair the surveillance portion of SRP.
Group
2013 2012
R'000 R'000
13. Earnings and headline earnings per share
13.1. Basic earnings per share
Profit for the year attributable to ordinary shareholders 506 628 302 111
Weighted average number of ordinary shares:
Issued ordinary shares at 1 January 86 877 600 86 877 600
Effect of own shares held (JSE LTIS 2010) (1 315 623) (1 001 589)
Weighted average number of ordinary shares at
31 December 85 561 977 85 876 011
Basic earnings per share (cents) 592.1 351.8
13.2. Diluted earnings per share
Profit for the year attributable to ordinary shareholders 506 628 302 111
Weighted average number of ordinary shares (diluted):
Weighted average number of ordinary shares at
31 December (basic) 85 561 977 85 876 011
Effect of share options in issue 514 487 556 960
Weighted average number of ordinary shares (diluted) 86 076 464 86 432 971
Diluted earnings per share (cents) 588.6 349.5
Group
2013 2012
R'000 R'000
The average market value of the Exchange's
shares for purposes of calculating the dilutive
effect of share options was based on quoted
market prices for the year.
13.3. Headline earnings per share
Reconciliation of headline earnings:
Profit for the year attributable to ordinary shareholders 506 628 302 111
Adjustments are made to the following:
Profit or loss on disposal of property and equipment 27 (69)
- Gross amount 38 (96)
- Taxation effect (11) 27
Impairment of intangible assets 60 795 116 191
- Gross amount 48 138 75 017
- Taxation effect 12 657 41 174
Net realised gain on disposal of available-for-sale financial assets (no taxation effect) (15 875) (11 834)
Headline earnings 551 575 406 399
Headline earnings per share (cents) 644.6 473.2
13.4. Diluted headline earnings per share
Diluted headline earnings per share (cents) 640.8 470.2
14. Intangible assets
During the twelve months ended 31 December 2013, the Group acquired intangible assets with a cost of R33.4m (2012: R74.4m), mainly in respect
of the listings information database, market data automation and T+3 Phase 2.
15. Contingent liabilities and commitments
15.1. Contingent liabilities
15.1.1. The JSE has a contingent liability in respect of a guarantee of R0.7m (2012: R0.7m) issued to the Financial Services Board.
15.1.2. A summons was served on the JSE during December 2011 in terms of which Pinnacle Point Holdings (Pty) Ltd (PPG) and four
other plaintiffs have instituted action against the JSE for payment of R1 387 451 336.30. These losses were allegedly suffered as
a result of the transaction concluded between the Acc-Ross group of companies and PPG. The JSE has lodged an exception
against the plaintiff's particulars of claim to dismiss the action against the JSE, which exception will be heard in due course.
15.2. Commitments
15.2.1. On 3 June 2013, the JSE entered into an extension to the operating lease on the building from which it conducts business.
The lease has been extended on revised terms and conditions and will now terminate on 30 August 2025. On termination of
the lease, the JSE has the right to extend the lease for an initial five-year period and thereafter for five-year periods ad infinitum.
The operating lease payments escalate at 8.25% per annum.
16. Fair value estimation
Financial instruments measured in the statement of financial position at fair value require disclosure. The following is the fair value measurement
hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that
is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The following table presents the Group's assets and liabilities that are measured at fair value.
Level 1 Level 2 Level 3 Total balance
R'000 R'000 R'000 R'000
2013
Assets
Other investments
- Equity securities (available-for-sale) 162 877 69 177 - 232 054
- Debt investments (available-for-sale) 16 731 - - 16 731
Total assets 179 608 69 177 - 248 785
2012
Assets
Other investments
- Equity securities (available-for-sale) 149 227 47 976 - 197 203
- Debt investments (available-for-sale) 17 854 - - 17 854
Total assets 167 081 47 976 - 215 057
The carrying values of the other financial assets and financial liabilities approximate their fair values.
17. Safcom Default Fund
The Safex Clearing Company (Pty) Limited (Safcom) operates as the JSE's appointed clearing house in terms of the Financial Markets Act, 2012.
In order to achieve recognition as a qualifying central counterparty (QCCP) under the CPSS-IOSCO provisions, clearing houses are required to
establish a default fund for mutualising losses in the event of a clearing member default.
Safcom has established such a default fund, and has been recognised by the Financial Services Board (FSB) as a QCCP with effect from January
2013.
Newshelf 1252 (Pty) Limited (Safcom Default Fund) is incorporated as a private for-profit company wholly owned by the JSE Limited with a limited
purpose of holding these funds. The JSE has invested R100 million into the fund and received contributions of R400 million from clearing members.
The R500 million is invested in fixed and call deposits.
Audit Opinion
KPMG Inc, the Group's independent auditor, has audited the consolidated annual financial statements of the JSE Limited from which the abridged
consolidated results contained in this report have been derived, and has expressed an unmodified audit opinion on the consolidated annual financial
statements. The abridged consolidated financial results comprise the statements of financial position at 31 December 2013 and the statements of
comprehensive income, changes in equity and cash flows for the year then ended and selected explanatory notes. A copy of the auditor's report is
available for inspection at the JSE's registered office.
One Exchange Square, 2 Gwen Lane, Sandown, South Africa
Private Bag X991174, Sandton, 2146, South Africa
Tel: +27 11 520 7000, Fax: +27 11 520 8584
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
11 March 2014
Date: 11/03/2014 01:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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