Abridged Audited Results for the Year Ended 31 December 2014 - STXRAF SATRIX RAFI 40 JSE code: STXRAF ISIN: ZAE000126033 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”) (the “portfolio”) ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2014 2014 2013 R R Income Dividend income 31 038 424 25 291 209 REIT income 609 728 - Interest income 161 858 517 437 Total income 31 810 010 25 808 646 Expenses Management fee (5 115 328) (4 350 962) Transaction costs (605 634) (237 862) Trustee and custodian fees (95 267) (77 503) Total operating expenses (5 816 229) (4 666 327) Income attributable to investors before distributions 25 993 781 21 142 319 Income distributions (26 051 927) (18 132 169) Income attributable to investors after distributions (58 146) 3 010 150 Realised gains on financial instruments designated at fair value through profit or loss 46 979 617 69 267 415 Unrealised (losses)/gains on financial instruments designated at fair value through profit or loss (13 683 627) 42 960 473 Total fair value adjustment 33 295 990 112 227 888 Increase in net assets attributable to investors after distributions 33 237 844 115 238 038 STATEMENT OF FINANCIAL POSITION at 31 December 2014 2014 2013 R R ASSETS Listed equities designated held at fair value through profit or loss 971 608 663 937 340 958 Interest receivable 8 000 553 Cash and cash equivalents 1 766 785 1 804 269 Total assets 973 383 448 939 145 780 LIABILITIES Other payables 421 830 393 721 Total liabilities (excluding net assets attributable to investors) 421 830 393 721 Net assets attributable to investors 972 961 618 938 752 059 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS for the year ended 31 December 2014 Capital Income Net assets attributable attributable attributable to investors to investors to investors R R R Balance at 1 January 2013 777 669 598 2 908 988 780 578 586 Creation of Satrix RAFI 40 Securities 27 719 222 - 27 719 222 Increase in net assets attributable to investors after distributions 112 227 888 21 142 319 133 370 207 Dividends reinvested 15 216 213 - 15 216 213 Distributions to investors - (18 132 169) (18 132 169) Capital Income Net assets attributable attributable attributable to investors to investors to investors R R R Balance at 31 December 2013 932 832 921 5 919 138 938 752 059 Redemption of Satrix RAFI 40 Securities (21 334 917) - (21 334 917) Increase in net assets attributable to investors after distributions 33 295 990 25 993 781 59 289 771 Dividends reinvested 22 306 632 - 22 306 632 Dividends previously reinvested 4 508 037 (4 508 037) - Distributions to investors - (26 051 927) (26 051 927) Balance at 31 December 2014 971 608 663 1 352 955 972 961 618 STATEMENT OF CASH FLOWS for the year ended 31 December 2014 2014 2013 R R Net cash generated from operating activities 26 014 443 18 282 376 Cash utilised by operations (5 788 120) (4 614 070) Interest received 154 411 521 193 Dividends received 31 038 424 22 375 253 REIT income received 609 728 - Cash outflow from investing activities (4 717 010) (45 851 391) Purchase of underlying constituents (153 317 083) (191 839 610) Sale of underlying constituents 148 600 073 145 988 219 Cash (outflow)/inflow from financing activities (21 334 917) 27 719 222 Creation of Satrix RAFI 40 Securities 27 719 222 Redemption of Satrix RAFI 40 Securities (21 334 917) - Net movement in cash and cash equivalents (37 484) 150 207 Cash and cash equivalents at the beginning of the year 1 804 269 1 654 062 Cash and cash equivalents at the end of the year 1 766 785 1 804 269 SATRIX RAFI 40 SECURITIES During the year, nil (2013: 3 000 000) Satrix Rafi 40 securities were created at a value of Rnil (2013: R27 719 222) and 2 000 000 (2013: nil) Satrix Rafi 40 securities were redeemed at a value of R21 334 917 (2013: Rnil). All creations and liquidations were in specie. Distributions The Portfolio announces dividends monthly. All distributions that were made out of income of the Satrix RAFI 40 Portfolio were reinvested back into the Portfolio net of withholding tax. During the year under review the following distributions were effected per Satrix RAFI 40 Security. 2014 2013 R R 1.29 cents per security Announced 28 March 2014 and re-invested 11 April 2014 1 107 817 1.35 cents per security Announced 28 March 2013 and re-invested 12 April 2013 797 846 11.66 cents per security Announced 25 April 2014 and re-invested 16 May 2014 10 013 290 6.87 cents per security Announced 26 April 2013 and re-invested 9 May 2013 5 831 068 1.83 cents per security Announced 30 May 2014 and re-invested 10 June 2014 1 571 554 2.62 cents per security Announced 31 May 2013 and re-invested 12 June 2013 2 302 384 1.29 cents per security Announced 29 August 2014 and re- invested 11 September 2014 1 107 817 1.11 cents per security Announced 30 August 2013 and re- invested 12 September 2013 975 438 8.95 cents per security Announced 26 September 2014 and re- invested 16 October 2014 7 686 016 7.81 cents per security Announced 27 September 2013 and re- invested 9 October 2013 6 863 215 3.69 cents per security Announced 31 October 2014 and re- invested 14 November 2014 3 168 871 3.69 cents per security Announced 25 October 2013 and 3 242 671 re-invested 04 November 2013 0.61 cents per security Announced 28 November 2014 and re- invested 3 December 2014 523 851 0.0 cents per security Announced 29 November 2013 - 0.89 cents per security Announced 24 December 2014 and re- invested 16 January 2015 764 308 1.05 cents per security Announced 27 December 2013 and re- invested 16 January 2014 922 711 Accrued income portion of NAV received on creation of securities (50 000) Total distribution 25 893 524 20 935 333 Operating Segments The Satrix RAFI 40 Portfolio offers only one product, being the specific exchange traded fund, tracking the specific identified index. Information regarding the results of the reportable segments is disclosed in Financial statements as currently set out, thus no further IFRS 8 disclosure is required. Fair value estimation 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 2014 R R R Financial instruments designated at fair value through profit or loss: Listed equities 971 608 663 – – Net assets attributable to investors – 972 961 618 – Total 971 608 663 972 961 618 – Level 1 Level 2 Level 3 31 December 2013 R R R Financial instruments designated at fair value through profit or loss: Listed equities 937 340 958 – – Net assets attributable to investors – 938 752 059 – Total 937 340 958 938 752 059 – 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 2014 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 2014 R R R Assets Interest receivable – 8 000 – Cash and cash equivalents – 1 766 785 – Total – 1 774 785 – Liabilities Other payables – – 421 830 Total – – 421 830 Level 1 Level 2 Level 3 31 December 2013 R R R Assets Interest receivable – 533 – Cash and cash equivalents – 1 804 269 – Total – 1 804 802 - Liabilities Other payables – – 393 721 Total – – 393 721 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. 2014 2013 R R Management fee paid Satrix Managers (RF) Proprietary Limited 5 087 222 3 807 115 Management fee payable at 31 December 2014 Satrix Managers (RF) Proprietary Limited 421 833 393 728 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 RAFI 40 Portfolio had a TER of 52.7 (2013: 52.8) basis points (annualised) for the period 1 January to 31 December 2014. 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. 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 Committee, 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 2014 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 2014, and have not been applied in preparing these financial statements. All standards and interpretations issued but not effective for the year ended 31 December 2014 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 Standard/Interpretation Effective date IFRS 9 Financial Instruments Annual periods beginning on or after 1 January 2018 IFRS 14 Regulatory deferral Annual periods beginning accounts on or after 1 January 2016 IFRS 15 Revenue from contracts Annual periods beginning with customers on or after 1 January 2017 IFRS 11 amendment Accounting for Annual periods beginning acquisition of interest on or after 1 January 2016 in joint operations IAS 16 and IAS 38 Clarification of Annual periods beginning amendment acceptable methods of on or after 1 January 2016 depreciation and amortisation IAS 16 and IAS 41 Agricultural: Bearer Annual periods beginning amendment plants on or after 1 January 2016 IAS 19 Defined benefit plans: Annual periods beginning Employee contributions on or after 1 July 2014 statements of the Portfolio. Preparer of Abridged annual financial statements for the year ended 31 December 2014 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 RAFI 40 Portfolio for the year ended 31 December 2014 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, 4th Floor, Building 2, 11 Alice Lane, Sandton. A full copy of these financial statements is available on the Satrix website www.satrix.co.za. 26 March 2015 Sponsor Vunani Corporate Finance Trustee Standard Chartered Bank Manager Satrix Managers (RF) Proprietary Limited Date: 26/03/2015 01:04:00 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.