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JSE LIMITED - Summarised consolidated annual results and cash and special dividend declaration for the year ended 31 December 2015

Release Date: 25/02/2016 17:12
Code(s): JSE     PDF:  
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Summarised consolidated annual results and cash and special dividend declaration for the year ended 31 December 2015

JSE Limited  
(Incorporated in the Republic of South Africa)  
(Registration number: 2005/022939/06)
Share code: JSE ISIN: ZAE000079711   

SUMMARISED CONSOLIDATED ANNUAL RESULTS AND CASH AND SPECIAL
DIVIDEND DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2015  

Responsibility for annual results

The preparation of these 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. This report is extracted from the audited information, but is not itself audited. The directors take full responsibility for the
preparation of this report and warrant that the financial information has been correctly extracted from the underlying audited annual
financial statements.

COMMENTARY

The JSE Limited ("the JSE" or "the Group") delivered an excellent financial performance in 2015. This is principally attributable to double-digit
revenue growth across all operating divisions, driven by significantly higher market activity, which was well handled by the increasingly robust
technology in which we continue to invest. Group earnings after tax for 2015 increased by 42% to R899 million (2014: R634 million), with
operating revenue growing by 20% to R2.1 billion (2014: R1.8 billion). 

Group earnings before interest and tax (EBIT) increased by 45% (2014: 22%) to R1 billion (2014: R704 million). The earnings per share (EPS)
and headline earnings per share (HEPS) statistics, at 1 051.0 cents (up 42%) and 1 026.3 cents (up 40%) respectively, reflect the Group's well
established commercial momentum.  

Revenue

With regard to operating revenue, good contributions were made by:

- The Primary Market, where there was a 20% increase in revenue to R161 million (2014: R134 million) as a result of increased listings activity
  and annual Equity listing fees being brought in line with global peers;
- The Equity Market, where billable value traded grew by 26%, resulting in a 25% increase in cash equities trading revenue to R501 million
  (2014: R402 million);
- BDA, where revenue grew by 16% to R311 million (2014: R268 million) as a result of a 33% growth in the number of Equity Market
  transactions. This was offset by rebates of R22 million paid in the first half of 2015 and enabled a price reduction of 20% from
  September 2015;
- The Equities Derivatives Market, where value traded increased by 11%, resulting in an 18% increase in revenue to R173 million
  (2014: R147 million);
- The Currency Derivatives Market, where revenue increased by 48% to R34 million (2014: R23 million);
- The Interest Rate Market, where bond nominal value traded increased by 21%, resulting in a 14% increase in revenue to R50 million
  (2014: R44 million);
- The Commodities Derivatives Market, where the increased number and value of contracts traded resulted in a 33% increase in revenue
  to R73 million (2014: R55 million); 
- Post-Trade Services, where clearing and settlement revenue related to equity trading grew by 19% to R357 million (2014: R299 million).
  The billing model was moved to a value-based model in the second half of 2014; and
- Market Data, where revenue grew by 16% (R31 million) to R226 million (2014: R195 million) owing to new business. Revenue from colocation
  contributed R19 million, up from R9 million, completing the first year of this product offering. Colocation accounted for 26% of the total value
  traded during the period.

Other income

Included in other income are forex gains of R83 million (2014: R19 million) related to the revaluation of the USD bank account and foreign
receivables.

Continued cost containment

The Group's total operating expenses increased by 11% (2014: 5.5%) to R1.26 billion (2014: R1.14 billion), including a deliberate increase
in general expenses of R291 million (14%). Included in operating expenses is R37 million (2014: R17 million) of project related operating
expenditure (opex) to deliver our key strategic technology initiatives. This leaves business-as-usual (BAU) expense growth of 9% for 2015. 

Technology costs increased by 16% to R235 million (2014: R202 million). This was mainly owing to planned and preventative maintenance on key
technology assets. 

Personnel costs increased by 6% to R496 million (2014: R467 million). This is made up as follows:

- Gross remuneration per employee increased by 7%. However, average headcount was 5% lower (excluding 17 learners appointed in
  August 2015), declining from 494 to 472. This resulted in a net 2 percentage point increase in the payroll bill. Headcount at year-end was
  506 (2014: 485);
- The discretionary bonus pool increased by R19 million to R82 million (2014: R63 million) owing to higher profits and represents a further
  4 percentage point increase;
- A tertiary education bursary fund for children of JSE staff who are not of a senior level. This amounted to R4 million (2014: R0 million) and
  increased personnel costs by 1 percentage point; 
- The accounting impact for LTIS increased by R3 million to R30 million (2014: R27 million), contributing 1 percentage point to the total
  growth; and
- Remuneration capitalised to projects increased by R8 million to R18 million (2014: R10 million) as work on strategic projects accelerated.
  This decreased personnel cost growth by 2 percentage points.

Depreciation was largely flat at R100 million (2014: R99 million), as a result of increased colocation and T+3 Phase 2 amortisation, which was
offset by fully depreciated assets.

General expenses increased by 14% to R291 million (2014: R256 million) largely owing to deliberate marketing costs (the launch of the TFSA, Eris
interest rate swap futures, and the hosting of the ASEA Conference) and placement costs for senior staff.

Robust balance sheet

We generated R888 million (2014: R768 million) and ended the year with a robust balance sheet, including R1.9 billion (2014: R1.6 billion) in cash.

We remain committed to our Group external capital expenditure, with R159 million (2014: R116 million) committed to our strategic initiatives.
All currently planned investments and capital requirements for 2016 can be funded from the Group's own resources.

The Board believes that the JSE is appropriately capitalised, given the nature of the risks we currently face and given the uncertain nature of
future regulatory capital requirements.

Changes to directorate during the period under review

In 2015, the following changes to our Board of Directors took place:

21 May 2015 (AGM):
- Sam Nematswerani retired as a Board member and as chairman of the Audit Committee, having been a director for 9 years and 10 months.
  We thank Sam for his sage advice over many years of service to the JSE.

1 July 2015:
- Suresh Kana was appointed to the Board as an independent non-executive director after he retired as senior partner of PwC Africa. He was
  also appointed to serve on the Audit Committee. Suresh will retire at the next annual general meeting as required by the Companies Act, but
  is available for election/re-election.

14 September 2015:
- Dr Leila Fourie, executive director responsible for the JSE's Post-Trade and Information Services (PTIS), has indicated that she will be leaving
  the JSE in mid-2016.

Declaration of ordinary and special dividend

The Board has decided to declare both an ordinary and a special dividend for the year ended December 2015 at 520 cents and 105 cents per
ordinary share respectively. This is reflective of the strong growth in earnings and is consistent with our dividend philosophy – in terms of which
we aim for steady growth in the ordinary dividend over time, and to provide an additional return to shareholders via special dividends to the
extent that the annual financial performance and the Group's capital position so permits. Accordingly, notice is hereby given that the directors
have declared the following:

                                                                                                    Annual gross   Withholding                
Dividend                                                                                                  amount         tax %   Net amount   
Ordinary                                                                                                    5.20            15         4.42   
Special                                                                                                     1.05            15       0.8925   
                                                                                                           6.25            15         5.31   

The dividend has been declared from retained earnings. 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 18 March 2016.

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. In compliance with the requirements of Strate, the following salient dates for the payment of the
ordinary and special dividend are applicable:

Dividend paid in year                                                                                           2016                   2015
In respect of financial year ended                                                                            31 Dec                 31 Dec
Gross dividend per share                                                                                   625 cents             480 cents
Rand value                                                                                              R543 million          R417 million
Declaration date                                                                              Thur, 25 February 2016    Thur, 5 March 2015
Last date to trade JSE shares cum dividend                                                        Fri, 11 March 2016      Fri, 5 June 2015
JSE shares commence trading ex-dividend                                                           Mon, 14 March 2016      Mon, 8 June 2015
Record date for purposes of determining the registered holders of JSE shares to participate
in the dividend at close of business on                                                           Fri, 18 March 2016     Fri, 12 June 2015
Date of payment of dividend                                                                       Tue, 22 March 2016     Mon, 15 June 2015

Share certificates may not be dematerialised or rematerialised from Monday, 14 March 2016, to 18 March 2016, both days inclusive. On
22 March 2016, 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 22 March 2016 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 22 March 2016.
The issued share capital of the Company as at the declaration date was 86 877 600. The tax number of the Company is 9313008840.

Notice of annual general meeting

Notice is hereby given that the eleventh annual general meeting (AGM) of shareholders of the JSE will be held at 15:30 on Thursday, 26 May 2016,
at the registered office of the Company, One Exchange Square, 2 Gwen Lane, Sandown, to transact the business as stated in the AGM notice
forming part of the annual financial statements. The AGM notice includes the proxy form.

Only persons physically present at the meeting or represented by a valid proxy will be entitled to cast a vote on any matter put to a vote of
shareholders.

Salient dates 2016 AGM
Record date to determine which shareholders are entitled to receive the notice of AGM                                      Friday, 4 March
Last day to trade in order to be eligible to attend and vote at the annual general meeting                                   Friday, 13 May
Record date to determine which shareholders are entitled to attend and vote at the AGM                                      Friday, 20 May
Forms of proxy for the annual general meeting to be lodged by 15:30 on*                                                     Tuesday, 24 May

* Any proxies not lodged by this time must be handed to the chairperson of the AGM immediately prior to the AGM.

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. Our revenues are variable and largely driven by activity on the various markets that we operate. For this reason, the Board
makes no projections regarding the Group's financial performance in 2016.

Notwithstanding the difficult economic environment in which we will be operating, we are clear about our 2016 priorities and hence the issues
that we need to tackle in order to achieve our strategy. This sets us up for a demanding number of years of investment and delivery which, while
impacting our income statement in the short term, are necessary to ensure our long-term sustainability.

Appreciation

2015 has been a hard year, but our focus on reviewing our business model and delivering as we planned to do have energised us to face the
competitive threats and opportunities we anticipate. These will, we believe, be critical elements in establishing our long-term sustainability.

We would like to thank all our stakeholders for their interaction with the JSE team. We have worked hard to build a more collaborative
relationship and we look forward to continuing our work in this regard in 2016.

We would like to thank all our colleagues at the JSE, and particularly the members of Exco. It is such a pleasure to work alongside this team.

Having celebrated 23 colleagues, each with more than 25 years of service, this year we are reminded of the extraordinary passion and
commitment the JSE team brings to this business every day.

Approval of financial statements

The consolidated and separate annual financial statements of the JSE Limited, as identified in the first paragraph, were approved by the Board of
Directors on 25 February 2016 and signed by:

N Nyembezi-Heita                    NF Newton-King
Chairman                            Chief Executive Officer

Audit opinion

KPMG Inc., the Group's independent auditor, has audited the consolidated annual financial statements of the JSE Limited from which the
consolidated results contained in this report have been derived, and has expressed an unmodified audit opinion on the consolidated annual
financial statements. The summarised consolidated financial results comprise the statements of financial position at 31 December 2015 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.

The auditor's report does not necessarily report on all of the information contained in the annual results and cash dividend declaration.
Shareholders are therefore advised to obtain a copy of the auditor's report together with the accompanying financial information from 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  

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2015
                                                                                                                     Group                                                                                                   
                                                                                                                   2015            2014
                                                                                                   Notes           R'000           R'000

Revenue                                                                                                 8       2 133 548       1 778 629
Other income                                                                                                     145 887          61 240
Personnel expenses                                                                                      9       (495 759)       (466 786)
Other expenses                                                                                         10       (760 920)       (669 290)
Profit from operating activities                                                                               1 022 756         703 793
Finance income                                                                                                 2 133 136       1 539 449
Finance costs                                                                                                (1 967 342)     (1 412 589)
Net finance income                                                                                               165 794         126 860
Share of profit of equity-accounted investee (net of income tax)                                                  46 568          36 955
Profit before income tax                                                                                       1 235 118         867 608
Income tax expense                                                                                     11       (335 640)       (233 269)
Profit for the year                                                                                              899 478         634 339
Other comprehensive income                                                                                                          
Items that are or may be reclassified to profit or loss                                                                             
Net change in fair value of available-for-sale financial assets                                                   24 191          27 143
Net change in fair value of available-for-sale financial assets reclassified to profit or loss                  (20 644)         (6 379)
Income tax on other comprehensive income                                                               11               –               –
Other comprehensive income for the year, net of income tax                                                         3 547          20 764
Total comprehensive income for the year                                                                          903 025         655 103
Earnings per share                                                                                                                  
Basic earnings per share (cents)                                                                     12.1         1 051.0           742.4
Diluted earnings per share (cents)                                                                   12.2         1 040.3           734.1
Other earnings                                                                                                                      
Headline earnings per share (cents)                                                                  12.3         1 026.3           735.0
Diluted headline earnings per share (cents)                                                          12.4         1 015.8           726.8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2015
                                                                                                                       Group                                                                 
                                                                                                                   2015            2014
                                                                                                   Notes           R'000           R'000
ASSETS                                                                                                                                
Non-current assets                                                                                             1 115 895         969 883
Property and equipment                                                                                           165 073         161 836
Intangible assets                                                                                      13         358 700         283 111
Investment in equity-accounted investee                                                                           187 030         159 284 
Other investments                                                                                                312 564         292 750
Loan to the JSE Empowerment Fund Trust                                                                            25 271          13 924
Deferred taxation                                                                                                 67 257          58 978
Current assets                                                                                                37 462 906      28 241 085
Trade and other receivables                                                                                      466 930         336 546
Income tax receivable                                                                                                594             605
JSE Clear Derivatives Default Fund collateral deposit                                                            500 000         500 000
Margin deposits                                                                                               34 447 066      25 676 434
Collateral deposits                                                                                              140 687          96 262
Cash and cash equivalents                                                                                      1 907 629       1 631 238
Total assets                                                                                                  38 578 801      29 210 968
EQUITY AND LIABILITIES                                                                                                                 
Total equity                                                                                                   2 956 152       2 473 994
Share capital                                                                                                      8 553           8 541
Share premium                                                                                                     57 954          63 348
Reserves                                                                                                         478 360         449 488
Retained earnings                                                                                              2 411 285       1 952 617
Non-current liabilities                                                                                          126 464         120 522
Borrowings                                                                                                             –          13 977
Employee benefits                                                                                                 10 845           5 761
Due to Safex members                                                                                               1 347           1 347
Deferred taxation                                                                                                 13 620           9 077
Operating lease liability                                                                                         87 435          74 358
Deferred income                                                                                                   13 217          16 002
Current liabilities                                                                                           35 496 185      26 616 452
Trade and other payables                                                                                         339 561         295 200
Income tax payable                                                                                                32 713          32 377
Employee benefits                                                                                                136 158         116 179
JSE Clear Derivatives Default Fund collateral contribution                                                       400 000         400 000
Margin deposits                                                                                               34 447 066      25 676 434
Collateral deposits                                                                                              140 687          96 262
Total equity and liabilities                                                                                  38 578 801      29 210 968

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2015
                                                                                               Share-
                                                                      Total                based                                   
                                                    Share     Share     share              payment       Total    Retained       Total
                                                   capital   premium   capital        NDR    reserve    reserves    earnings      equity
Group                                                R'000     R'000     R'000      R'000      R'000       R'000       R'000       R'000

Balance at 1 January 2014                            8 533    84 671    93 204    386 335     44 740     431 075   1 664 187   2 188 466
Profit for the year                                      –         –         –          –          –           –     634 339     634 339
Other comprehensive income                               –         –         –     20 764          –      20 764           –      20 764
Total comprehensive income for the year                  –         –         –     20 764          –      20 764     634 339     655 103
LTIS Allocation 1 – shares vested                       35    11 365    11 400          –   (11 400)    (11 400)           –           –
LTIS Allocation 2 – shares vested                       16    10 442    10 458          –   (10 458)    (10 458)           –           –
Distribution from the BESA Guarantee
Fund Trust1                                              –         –         –    (3 280)          –     (3 280)       3 280           –
Dividends paid to owners                                 –         –         –          –          –           –   (347 457)   (347 457)
Equity-settled share-based payment                       –         –         –          –     21 055      21 055           –      21 055
Reserves arising on acquisition of Strate (Pty)
Limited transferred                                      –         –         –   (10 058)          –    (10 058)      10 058           –
Transfer of profit from investor protection
funds                                                    –         –         –     11 790          –      11 790    (11 790)           –
Treasury shares                                       (43)  (42 974)  (43 017)          –          –           –           –    (43 017)
Treasury shares – share issue costs                      –     (156)     (156)          –          –           –           –       (156)
Total contributions by and distributions to
owners of the Company recognised directly
in equity                                                8  (21 323)  (21 315)    (1 548)      (803)     (2 351)   (345 909)   (369 575)
Balance at 31 December 2014                          8 541    63 348    71 889    405 551     43 937     449 488   1 952 617   2 473 994
Profit for the year                                      –         –         –          –          –           –     899 478     899 478
Other comprehensive income                               –         –         –      3 547          –       3 547           –       3 547
Total comprehensive income for the year                  –         –         –      3 547          –       3 547     899 478     903 025
LTIS Allocation 2 – shares vested                       16     8 441     8 457          –    (8 457)     (8 457)           –           –
LTIS Allocation 3 – shares vested                       15    12 162    12 177          –   (12 177)    (12 177)           –           –
Distribution from the BESA Guarantee Fund
Trust(1)                                                 –         –         –    (3 591)          –     (3 591)       3 591           –
Dividends paid to owners                                 –         –         –          –          –           –   (416 516)   (416 516)
Equity-settled share-based payment                       –         –         –          –     21 665      21 665           –      21 665
Transfer of profit from investor protection
funds                                                    –         –         –     27 885          –      27 885    (27 885)           –
Treasury shares                                       (19)  (25 783)  (25 802)          –          –           –           –    (25 802)
Treasury shares – share issue costs                      –     (214)     (214)          –          –           –           –       (214)
Total contributions by and distributions to
owners of the Company recognised directly
in equity                                               12   (5 394)   (5 382)     24 294      1 031      25 325   (440 810)   (420 867)
Balance at 31 December 2015                          8 553    57 954    66 507    433 392     44 968     478 360   2 411 285   2 956 152

(1) The BESA Guarantee Fund Trust Deed makes specific provision for the utilisation of excess funds for the purpose of reducing the risk of claims being made against
    the Trust. To this effect, R3.6 million (December 2014: R3.3 million) before intercompany adjustments was transferred to the JSE Limited for the defrayment of
    market regulatory expenditure.

CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2015
                                                                                                                        Group                                                                                                                             
                                                                                                                     2015            2014
                                                                                                                   R'000           R'000     
Cash flows from operating activities                                                                                                     
Cash generated by operations                                                                                    1 058 178         850 171
Interest received                                                                                               2 081 875       1 477 111
Interest paid                                                                                                 (1 919 176)     (1 358 914)
Dividends received                                                                                                  6 455           5 001
Taxation paid                                                                                                   (339 029)       (204 866)
Net cash generated by operating activities                                                                        888 303         768 503
Cash flows from investing activities                                                                                                    
Proceeds on sale of other investments                                                                              74 090          35 284
Acquisition of other investments                                                                                 (69 712)        (51 533)
Contributions for JSE Clear Derivatives Default Fund                                                                    –          16 870
Dividends from equity-accounted investee                                                                           18 823          19 779
Proceeds from disposal of property and equipment                                                                      759             295
Leasehold improvements                                                                                              (893)         (6 370)
Acquisition of intangible assets                                                                                (123 594)        (65 741)
Acquisition of property and equipment                                                                            (54 875)        (59 093)
Net cash used in investing activities                                                                           (155 402)       (110 509)
Cash flows from financing activities                                                                                                    
Proceeds from sale of treasury shares                                                                              13 969               –
Contributions paid to JSE Clear Derivatives Default Fund                                                                –        (10 000)
Loan repaid                                                                                                      (13 977)         (5 078)
Acquisition of treasury shares                                                                                   (39 986)        (43 173)
Dividends paid                                                                                                  (416 516)       (347 457)
Net cash used in financing activities                                                                           (456 510)       (405 708)
Net increase in cash and cash equivalents                                                                         276 391         252 286
Cash and cash equivalents at 1 January                                                                          1 631 238       1 378 952                                                                       
Cash and cash equivalents at 31 December 2015                                                                   1 907 629       1 631 238

SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015  

1.    Reporting entity 
                                                   
      JSE Limited (the "JSE" or the "Company") 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: primary market
      services, trading, clearing and settlement 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 2015
      comprise the Company and its subsidiaries and controlled structured entities (collectively referred to as the "Group" and individually as
     "Group entities") and reflect the Group's interest in associates. 

      When reference is made to the "Group" in the accounting policies, it should be interpreted as referring to the Company, where the context
     requires, unless otherwise noted.

2.    Basis of preparation   
                                             
     Statement of compliance  
                                         
      The consolidated financial statements and the separate financial statements of the Company have been prepared in accordance with
      International Financial Reporting Standards (IFRSs), including IAS 34, the SAICA financial reporting guides as issued by the Accounting
      Practice Committee, the Financial Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings Requirements
     and the requirements of the Companies Act, 2008.

3.    Changes in accounting policies 
                                     
      All accounting policies applied by the Group in these consolidated financial statements are in terms of IFRS and are the same as
     those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2015.

4.    Comparative figures  
                                               
     Unless otherwise indicated, comparative figures refer to the 12 months ended December 2014.

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 2015.

7.    Operating segment 
                                                  
     Reorganisation of operating segments

      During the period under review and following the organisational restructure in 2014, management refined the manner in which
      operational segments are reported. In order to align to the internal reporting structure of the Group, several changes have been made to
     the disclosure of operating segments.

     The most significant changes are as follows:

      - previously disclosed as ‘Cash equities' have now been split into individual segments: namely Back-Office Services (BDA), Equity
        Market fees, Primary Market fees (which represent/comprise listing fees for the Equity Market products) [2015: R145 million;
       2014: R115 million], membership fees and Post-Trade Services.
      - previously disclosed as ‘Equity and currency derivatives' have now been split into individual segments, namely equity derivative fees
       and currency derivative fees.
      - previously disclosed as ‘Interest Rate Market' has now been split into individual segments: namely Interest Rate Market fees and
       Primary Market fees (which reflect listing fees for the Interest Rate Market products) [2015: R19 million; 2014: R16 million].
      - previously disclosed as ‘Other' have been separately disclosed into individual segments of funds under management and Strate ad
       valorem fees related to the Cash Equities Market.

      In addition to the changes detailed above, comparatives have been restated and operating segments have been grouped into the following
     operational divisions:

     - Capital Markets
     - Post-trade and Information Services
     - Trading and Market Services

     Operating segments have been disclosed in note 8.1
                                                                                                                    Group
                                                                                                                 2015            2014
                                                                                                                 R'000           R'000 
8.    Operating segments and revenue                                                                                                  

      8.1   Revenue comprises:                                                                                                       
           Capital Markets                                                                                                          
             Equity Market fees                                                                               501 190         402 292
             Equity derivatives fees                                                                          173 434         147 078
             Currency derivatives fees                                                                         34 009          23 392
             Interest Rate Market fees                                                                         50 240          43 810
             Commodity derivatives fees                                                                        73 069          55 191
             Primary Market fees                                                                              160 644         134 213
           Post-Trade and Information Services                                                                                      
             Post-Trade Services                                                                              356 677         299 265
             Market Data fees                                                                                 244 937         203 852
           Trading and Market Services                                                                                              
             Back-Office Services (BDA)                                                                       310 717         268 096
             Funds under management                                                                            86 415          76 186
               Trading Services                                                                                  19 944          24 153
       
           Total revenue excluding Strate ad valorem fees                                                   2 011 276       1 677 528
             Strate ad valorem fees – cash equities                                                             122 272         101 101
       
                                                                                                              2 133 548       1 778 629
9.     Personnel expenses                                                                                                               
      Remuneration paid                                                                                        465 464         444 716
      Gross amount paid                                                                                        483 091         455 038
      Less: Capitalised to intangible assets                                                                   (17 627)        (10 322)
       Long-term incentive schemes                                                                               30 295          22 070
                                                                                                                495 759         466 786
10.    Other expenses
                                                                                                                 Group
                                                                                                                   2015            2014
                                                                                                                R'000           R'000
   
      Other expenses                                                                                             526 340         467 203
       Technology costs                                                                                         234 580         202 087
                                                                                                              760 920         669 290
11.    Income tax expense                                                                                                                       
      The Group's consolidated effective tax rate for the year ended 31 December 2015 was 27% (2014: 27%).
      We are currently investigating the tax treatment of software development costs, which may impact the taxation charge in future.

                                                                                                                         Group
                                                                                                                  2015            2014
                                                                                                                 R'000           R'000
12.    Earnings and headline earnings per share

      12.1 Basic earnings per share                                                                                                        

            Profit for the year attributable to ordinary shareholders                                            899 478         634 339
          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)                                                         (1 297 984)     (1 435 563)
          Weighted average number of ordinary shares at 31 December                                         85 579 616      85 442 037
            Basic earnings per share (cents)                                                                     1 051.0           742.4
       
      12.2 Diluted earnings per share                                                                                                 

            Profit for the year attributable to ordinary shareholders                                            899 478         634 339
          Weighted average number of ordinary shares (diluted):                                                                       
          Weighted average number of ordinary shares at 31 December (basic)                                  85 579 616      85 442 037
          Effect of LTIS share scheme                                                                          885 896         965 962
          Weighted average number of ordinary shares (diluted)                                              86 465 512      86 407 999
          Diluted earnings per share (cents)                                                                   1 040.3           734.1
            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.                                                          
       
      12.3 Headline earnings per share                                                                                              

          Reconciliation of headline earnings:                                                                                       
          Profit for the year attributable to ordinary shareholders                                             899 478         634 339
          Adjustments are made to the following:                                                                                   
            Profit or loss on disposal of property and equipment                                                    (536)              37
          – Gross amount                                                                                          (745)              51
          – Taxation effect                                                                                         209            (14)
          Net realised gain on disposal of available-for-sale financial assets (no taxation effect)            (20 644)         (6 379)
          Headline earnings                                                                                    878 298         627 997
          Headline earnings per share (cents)                                                                  1 026.3           735.0

      12.4 Diluted headline earnings per share                                                                                         

            Diluted headline earnings per share (cents)                                                          1 015.8           734.1

13.    Intangible assets

       Included in the intangible assets of R359 million (2014: R283 million), are newly developed intangible assets of R137 million (2014: R97 million),
      mainly in respect of T+3, client relationship management and integrated trading and clearing.

14.    Share-based payments

      (i)   Vesting of Allocation 2 Tranche 2 shares during the period under review

           The second award (Allocation 2) under LTIS 2010 was granted in May 2011 with the following vesting profile:
           Tranche 1: 50% of the total award, which vested on 1 May 2014
           Tranche 2: 50% of the total award, vesting on May 2015 (during the period under review)

           Tranche 2 – fully vested    
                                   
           All available Tranche 2 retention shares (110 450 shares) vested for those participants still in the employ of the JSE on 1 May 2015.

             In respect of Tranche 2 corporate performance shares, the Board assessed performance over the four-year vesting term against the
             pre-set financial and strategic targets and determined that 78% of these Tranche 2 shares should vest for those participants still
             in the employ of the JSE on 1 May 2015. The remainder of the Tranche 2 corporate performance shares (being 8 679 shares) was
           forfeited by participants.

           The vesting of Tranche 1 was completed in 2014. As at 31 December 2015, details of Tranche 2 were as follows:

                                                                                                                Corporate             
                                                                                                 Retention     performance        Total
                                                                                                    shares          shares       shares
          
            Original number of Tranche 2 shares awarded in May 2011                                 158 750          54 700      213 450
            Forfeited by leavers to date                                                           (34 300)        (15 250)     (49 550)
            Tranche 2 shares forfeited for missing performance targets                                    –         (8 679)      (8 679)
            Accelerated for good leavers                                                           (14 000)         (7 293)     (21 293)
             Tranche 2 shares vested on 1 May 2015                                                (110 450)        (23 478)    (133 928)
             Tranche 2 shares outstanding                                                                 –               –            –

(ii)         Vesting of Allocation 3 Tranche 1 shares during the period under review   
                                                             
            The third award (Allocation 3) under LTIS 2010 was granted in June 2012 with the following vesting profile:                            
            Tranche 1: 50% of the total award, which vested on 30 June 2015                                                                        
            Tranche 2: 50% of the total award, vesting on 30 June 2016 
                                                                                  
            Tranche 1 – fully vested  
                                                                                                             
             116 533 personal performance shares vested for those participants still in the employ of the JSE on 1 June 2015, with 1 017 shares
            being forfeited for missing personal performance targets.

             In respect of Tranche 1 corporate performance shares, the Board assessed performance over the four-year vesting term against the
             pre-set financial and strategic targets and determined that 78.07% of these Tranche 1 shares should vest for those participants still
             in the employ of the JSE on 1 June 2015. The remainder of the Tranche 1 corporate performance shares (being 10 713 shares) was
            forfeited by participants.

            As at 31 December 2015, details of Allocation 3 Tranche 1 were as follows:
                                                                                                                 Corporate             
                                                                                                  Retention     performance       Total
                                                                                                     shares          shares      shares
 
            Original number of Tranche 1 shares awarded in June 2012                                 131 800          51 500     183 300
            Forfeited by leavers to date                                                            (14 250)         (2 650)    (16 900)
            Tranche 1 shares forfeited for missing performance targets                               (1 017)        (10 713)    (11 730)
             Tranche 1 shares vested on 1 June 2015                                                (116 533)        (38 137)   (154 670)
             Tranche 1 shares outstanding                                                                  –               –           –
 
(iii)   Grant of Allocation 6 under LTIS 2010 during the period under review

        At the annual general meeting held on 21 May 2015, shareholders approved two special resolutions authorising the acquisition of
        shares for the purposes of awards under the LTIS 2010 scheme as well as the provision of financial assistance to the JSE LTIS 2010
        Trust for a period of two years, for the purpose of acquiring such 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 these resolutions, the Board approved a
        fresh annual allocation of shares (Allocation 6) to selected employees for the 2015 year, and these individual allocations were all
        accepted by scheme participants by 1 June 2015. Allocation 6 comprised a total of 302 340 JSE ordinary shares and these shares
        were acquired in the open market by 29 May 2015, at a volume-weighted average price (including all execution costs) of R131.54 per
       ordinary share. These shares are held in trust and are restricted until all vesting conditions are fulfilled, whereupon the shares vest.

        Included in the total number of shares granted of 302 340, a total of 160 620 corporate performance shares has been granted to
        members of the JSE's Executive Committee. No personal performance shares were allocated under Allocation 6.
        
        Information on Allocation 6 is as follows:
                                                                                                                               Corporate
                                                                                                                             performance
                                                                                                                                 shares
        
        Share price at grant date (rands per share)                                                                                131.54
        Total number of shares granted                                                                                            302 340
        Dividend yield                                                                                                                 3%
        Grant date                                                                                                           1 June 2015
        
        Vesting profile:                                                                                                                
        50% of the shares awarded vest on 31 May 2018                                                                             151 170
        50% of the shares awarded vest on 31 May 2019                                                                            151 170
        
        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:
                                                                                                                          2015     2014
        
        Allocation 1 (granted in May 2010)                                                                                     –    R0.7m
        Allocation 2 (granted in May 2011)                                                                                 R0.7m    R1.1m
        Allocation 3 (granted in June 2012)                                                                                R5.3m    R5.0m
        Allocation 4 (granted in May 2013)                                                                                 R6.6m    R8.0m
        Allocation 5 (granted in May 2014)                                                                                 R5.5m    R6.2m
        Allocation 6 (granted in June 2015)                                                                               R3.1m        –
                                                                                                                        R21.2m   R21.0m
15.     Contingent liabilities and commitments

       15.1 Contingent liabilities

             15.1.1 The JSE has a contingent liability in respect of a guarantee of R0.7 million (2014: R0,7 million) issued to the Financial Services
                  Board.

             15.1.2 During the year under review, a matter involving Pinnacle Point Holdings (Pty) Ltd (PPG) and other plaintiffs, for which a contingent 
                    liability was disclosed in prior years, has been disposed as a result of withdrawal of action against the JSE.

        15.2 Commitments

             There were no changes to the commitment as disclosed in the annual financial statements for 31 December 2014 except for the
             change below: In order to fulfil the liquidity risk management obligations of JSE Clear (Pty) Ltd as a qualified central counterparty, in
             compliance with CPSS-IOSCO4, the Group entered into additional commitment to the value of R500 million with a local commercial
            bank. The commitment is renewable on an annual basis. This brings the Group's total liquidity facility to R2 billion.

        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
   2015                                                                                                                             
   Assets                                                                                                                           
   Other investments                                                                                                                
   – Equity securities (available-for-sale)                                                  154 775   129 098         –         283 873
    – Debt investments (available-for-sale)                                                   28 690         –         –          28 690
    Total assets                                                                             183 465   129 098         –         312 563
 
   2014                                                                                                                             
   Assets                                                                                                                           
   Other investments                                                                                                                
   – Equity securities (available-for-sale)                                                  186 885    80 567         –         267 452
    – Debt investments (available-for-sale)                                                   25 297         –         –          25 297
    Total assets                                                                             212 182    80 567         –         292 749
 
    The carrying values approximate the fair value.

Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)
25 February 2016

Date: 25/02/2016 05:12:00 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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