Abridged audited results for the year ended 31 December 2013 - STXRES SATRIX RESI JSE Code: STXRES ISIN: ZAE000078622 A portfolio in the Satrix Collective Investment Scheme ("Satrix") registered as such in terms of the Collective Investment Schemes Control Act, 45 of 2002 (the "Act") ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2013 2013 2012 R R Income Dividend income 15 182 069 8 315 389 Fee income: Securities lending 89 211 84 975 Interest income 72 760 63 783 Other income - 93 952 Total income 15 344 040 8 558 099 Expenses Management fee (2 127 573) (1 488 431) Transaction costs (125 026) (56 195) Trustee and custodian fees (62 478) (64 767) Total operating expenses (2 315 077) (1 609 393) Income attributable to investors before distributions 13 028 963 6 948 706 Income distributions (13 025 852) (7 064 311) Realised gains on financial instruments designated at fair value through profit or loss 23 245 109 1 866 682 Unrealised (losses)/gains on financial instruments designated at fair value through profit or loss (28 340 657) 30 387 Total fair value adjustment (5 095 548) 1 897 069 (Decrease)/Increase in net assets attributable to investors after distributions (5 092 437) 1 781 464 STATEMENT OF FINANCIAL POSITION at 31 December 2013 2013 2012 R R ASSETS Listed equities designated as held at fair value through profit or loss 483 963 723 486 542 580 Interest receivable 1 243 8 699 Securities lending fee receivable 7 374 6 148 Other receivables - 7 615 Underlying securities sold and not settled - 50 274 Cash and cash equivalents 2 569 883 2 560 923 Total assets 486 542 223 489 176 239 LIABILITIES Distributions payable to investors 2 021 546 2 006 707 Other payables 175 467 195 299 Underlying securities purchased and not settled - 53 277 Total liabilities (excluding net assets attributable to investors) 2 197 013 2 255 283 Net assets attributable to investors 484 345 210 486 920 956 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS for the year ended 31 December 2013 Capital attributable to Income attributable to Net assets attributable to investors investors investors R R R Balance at 1 January 2012 281 441 388 493 981 281 935 369 Creation of Satrix RESI Securities 203 204 123 - 203 204 123 Increase in net assets attributable to investors after distributions 1 897 069 (115 605) 1 781 464 Capital attributable Income attributable Net assets attributable to investors to investors to investors Balance at 31 December 2012 486 542 580 378 376 486 920 956 Creation of Satrix RESI Securities 87 114 381 - 87 114 381 Redemption of Satrix RESI Securities (84 597 690) - (84 597 690) Increase in net assets attributable to investors after distributions (5 095 548) 3 111 (5 092 437) Balance at 31 December 2013 483 963 723 381 487 484 345 210 STATEMENT OF CASH FLOWS for the year ended 31 December 2013 2013 2012 R R Net cash generated from operating activities 13 019 973 7 029 123 Cash utilised by operations (2 330 297) (1 440 409) Fee income: Securities lending 87 985 94 573 Interest received 80 216 59 570 Dividend received 15 182 069 8 315 389 Cash (outflow)from investing activities (2 516 691) (203 204 123) Purchase of underlying constituents (142 290 043) (214 830 284) Sale of underlying constituents 139 773 352 11 626 161 Cash (outflow)/ inflow from financing activities (10 494 322) 197 090 426 Creation of Satrix RESI Securities 87 114 381 203 204 123 Redemptions of Satrix RESI Securities (84 597 690) - Cash distributed to security holders (13 011 013) (6 113 697) Net movement in cash and cash equivalents 8 960 915 426 Cash and cash equivalents at the beginning of the year 2 560 923 1 645 497 Cash and cash equivalents at the end of the year 2 569 883 2 560 923 Satrix RESI SECURITIES During the year, 2 000 000 (2012: 4 000 000) Satrix Resi securities were created at a value of R87 114 381 (2012: R203 204 123) and 2 000 000 (2012: Rnil) Satrix Resi securities were redeemed at a value of R84 597 690 (2012: Rnil). All creations and redemptions were in specie. Distributions The Portfolio effects quarterly distributions. All distributions were made out of income of the Satrix RESI Portfolio. The record dates were 28 March 2013, 28 June 2013, 27 September 2013 and 27 December 2013 respectively. During the year under review the following distributions were effected per Satrix RESI Index Security. 2013 2012 R R 53.39 cents per security Declared 28 March 2013 and paid 19 April 2013 5 065 630 38.33 cents per security Declared 30 March 2012 and paid 11 April 2012 2 103 541 6.69 cents per security Declared 28 June 2013 and paid 12 July 2012 768 546 23.18 cents per security Declared 29 June 2012 and paid 10 July 2012 1 272 113 56.64 cents per security Declared 27 September 2013 and paid 16 October 2013 5 373 989 47.82 cents per security Declared 28 September 2012 and paid 12 October 2012 2 624 350 21.31 cents per security Declared 27 December 2013 and paid 24 January 2014 2 021 887 21.15 cents per security Declared 28 December 2012 and paid 17 January 2013 2 006 707 Accrued income portion of NAV (paid)/received on redemption/(creation) of securities (204 200) (942 400) Total distributions 13 025 852 7 064 311 Fair value estimation IFRS 13 became effective in the current year. We have assessed the impact of the new requirements and have found that no changes with regard to fair value measurement are necessary. The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of trading at the year-end date. The following tables analyse, within the fair value hierarchy, the Portfolio's financial assets and liabilities (by class) measured at fair value at 31 December: Level 1 Level 2 Level 3 31 December 2013 R R R Financial instruments designated at fair value through profit or loss: Listed equities 483 963 723 – – Net assets attributable to investors – 484 345 210 – Total 483 963 723 484 345 210 – 31 December 2012 Financial instruments designated at fair value through profit or loss: Listed equities 486 542 580 – – Net assets attributable to investors – 486 920 956 – Total 486 542 580 486 920 956 – The following table analyses, within the fair value hierarchy, the Portfolio's assets and liabilities (by class) not measured at fair value at 31 December 2013 but for which fair value is disclosed: The assets and liabilities included in the below table are carried at amortised cost; their carrying values are a reasonable approximation of fair value. Level 1 Level 2 Level 3 31 December 2013 R R R Assets Interest receivable – 1 243 – Securities lending fee receivable – – 7 374 Other receivables – – - Underlying securities sold and not settled – – – Cash and cash equivalents – 2 569 883 – Total – 2 571 126 7 374 Level 1 Level 2 Level 3 R R R Liabilities Distributions payable to investors – – 2 021 546 Other payables – – 175 467 Total – – 2 197 013 Level 1 Level 2 Level 3 31 December 2012 R R R Assets Interest receivable – 8 699 – Securities lending fee receivable – – 6 148 Other receivables – – 7 615 Underlying securities sold and not settled – – 50 274 Cash and cash equivalents – 2 560 923 – Total – 2 569 622 64 037 Liabilities Distributions payable to investors – – 2 006 707 Other payables – – 195 299 Underlying securities purchased and not settled – – 53 277 Total – – 2 255 283 Related parties Related parties include Satrix Managers (RF) (Proprietary) Limited in its capacity as the management company of the Portfolio. The following related party balances and transactions occurred during the year. 2013 2012 R R Management fee paid Satrix Managers (RF) (Proprietary) Limited 1 872 360 1 304 689 Management fee payable at 31 December 2013 Satrix Managers (RF) (Proprietary) Limited 175 016 185 130 All related party transactions are conducted at arm's length on normal commercial terms and conditions. Outstanding balances will be settled in the ordinary course of business. Total Expense Ratio ('TER') The TER is a standard measure used by the Collective Investment Scheme ('CIS') industry to illustrate costs of portfolios on a comparable basis. The TER includes the management fee, audit fees, bank charges, custodian fees, costs related to securities lending and taxes. The Satrix RESI Portfolio had a TER of 45.58(2012: 45.60) basis points (annualised) for the period 1 January to 31 December 2013. The ratio is calculated based on the Association for Savings and Investments South Africa ('ASISA') standard and does not include the cost of acquiring assets. Increased consumer demand for greater transparency in financial services and the recognition thereof by the collective investment industry requires managers to calculate and publish a total expense ratio for each Portfolio under their management. This is a requirement in terms of the ASISA standard on the calculation and publication of total expense ratios. The Portfolio engages in securities lending with the sole aim of reducing the net expenses of managing the Satrix RESI Portfolio and in this way the income from securities lending proves beneficial to all holders of Satrix RESI Portfolio. Statement of compliance The financial statements are prepared in accordance with International Financial Reporting Standards ('IFRS') issued by the International Accounting Standards Board ('IASB') and SAICA Financial Reporting Guides as issued by the Accounting Practices, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and in accordance with the requirements of the Collective Investment Schemes Control Act of South Africa('CISCA'), in order to meet the requirements of the Trust Deed approved by the Financial Services Board. The abridged financial results have been prepared in accordance with the framework concepts and the recognition and measurement requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Board. The disclosures comply with International Accounting Standards (IAS) 34. Functional and presentation currency These financial statements are presented in South African Rand, which is the Portfolio's functional currency. Accounting policies The financial statements incorporate the principal accounting policies that are consistent with those adopted in the previous financial year. The new pronouncements applicable for the financial year ending 31 December 2013 for the first time, was assessed and did not have a significant impact to the financial position or performance of the Portfolio. Forthcoming requirements New standards, amendments to standards and interpretations not yet adopted A number of standards, amendments to the standards and interpretations are not effective for the year ended 31 December 2013, and have not been applied in preparing these financial statements. All standards and interpretations issued but not effective for the year ended 31 December 2013 have been considered. None of these are expected to have a significant effect on the recognition and measurement of the amounts recognised in the financial statements of the Portfolio. Standard/Interpretation Effective date IAS 32 amendment Offsetting financial assets and financial Annual periods beginning on or after 1 January liabilities 2014 IAS 27 amendment Investments in Associates and Joint Annual periods beginning on or after 1 January Ventures 2014 IFRS 10 amendment Consolidated Financial Statements Annual periods beginning on or after 1 January 2014 IFRS 12 amendment Disclosure of Interests in Other Entities Annual periods beginning on or after 1 January 2014 IAS 36 amendment Impairment of assets Annual periods beginning on or after 1 January 2014 IAS 39 amendment Financial instruments: Recognition and Annual periods beginning on or after 1 January measurement 2014 IFRIC 21 Levies Annual periods beginning on or after 1 January 2014 IAS 24 - Amendment Management entity Annual periods beginning on or after 1 July 2014 IFRS 2 - Amendment Vesting conditions Annual periods beginning on or after 1 July 2014 IFRS 3 - Amendment Contingent consideration Annual periods beginning on or after 1 July 2014 IFRS 9 - Amendment Financial Instruments Annual periods beginning on or after 1 January 2015 Preparer of Abridged annual financial statements for the year ended 31 December 2013 These Abridged annual financial statements have been prepared by R D Martin CA(SA), the Company Secretary. Audit report Ernst & Young Inc, the entity's independent auditors, has audited the abridged results of the Satrix RESI Portfolio for the year ended 31 December 2013 and has expressed an unmodified audit opinion thereon. The auditor also expressed an unmodified opinion on the annual financial statements from which these abridged results were derived. Their audit report and the abridged results is available for inspection at the registered office of Satrix Managers (RF) (Pty) Limited, First Floor, Three Exchange Square, 87 Maude Street, Sandown. A full copy of these financial statements is available on the Satrix website www.satrix.co.za. 26 March 2014 Sponsor Vunani Corporate Finance Trustee ABSA Bank Limited Manager Satrix Managers (RF) (Proprietary) Limited Date: 26/03/2014 05:26:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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