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Condensed consolidated interim financial statements for the six months ended 31 March 2016
SYGNIA LIMITED
Registration number 2007/025416/06
Incorporated in the Republic of South Africa
JSE SHARE CODE: SYG
ISIN CODE: ZAE0002088015
(“SYGNIA” OR “THE COMPANY” OR “THE GROUP”)
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH 2016
SYGNIA HIGHLIGHTS FOR THE SIX MONTHS ENDED 31 MARCH 2016
COMPARATIVES SHOWN ARE FOR THE PERIODS ENDING 31 MARCH 2015 AND 31 MARCH 2014
PROFIT FOR THE ASSETS UNDER MANAGEMENT
SIX MONTHS AND ADMINISTRATION
UP 19.4% UP 20.7%
Rm
Rb
18.1 29.2 34.9 107 121 146
2014 2015 2016 2014 2015 2016
REVENUE FOR THE SIX MONTHS NUMBER OF STAFF
UP 19.7% UP 10.0%
Rm
77 110 131 91 110 121
2014 2015 2016 2014 2015 2016
FIRST DIVIDEND SINCE LISTING
25c PER SHARE
GENERAL INFORMATION
Nature of business and Sygnia Limited and its subsidiaries (“the Group”) are a specialist financial services group headquartered in
principal activities South Africa and listed on the Johannesburg Stock Exchange ("JSE"). The Group focuses on the provision
of investment management and administration solutions to institutional and retail clients predominantly
located in South Africa. The main services provided by the Group include multi-manager investment
solutions, index-tracking investment solutions, customised/bespoke investment strategy management,
stockbroking, transition management and investment administration/platform services.
Country of incorporation South Africa
and domicile
Directors MF Wierzycka (CEO)
HI Bhorat (Chairman) #
NJ Giles (CFO)
KT Hopkins *#
SA Zinn (Lead Independent) *#
IK Moyane *#
* Independent # Non - executive
Registered office 7th Floor, The Foundry
Cardiff Street
Green Point
Cape Town
8001
Postal address PO Box 51591
Waterfront
8002
Auditor KPMG Inc.
Registered Auditors
1 Mediterranean Street
Foreshore
Cape Town
8001
South Africa
Company secretary DI Johnson Resigned - 23/03/2016
N Muller Appointed - 23/03/2016
Company registration 2007/025416/06
number
SYGNIA LIMITED Registration Number: 2007/025416/06
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH 2016
CONTENTS
COMMENTARY OF THE DIRECTORS 04 - 06
INDEPENDENT AUDITOR’S REVIEW REPORT 07
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION 08
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 09
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY 10
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 11
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 12 - 23
COMMENTARY OF THE DIRECTORS FOR THE SIX MONTHS ENDED 31 MARCH 2016
HIGHLIGHTS BUSINESS UPDATE
ASSETS UNDER MANAGEMENT AND ADMINISTRATION OF Sygnia listed on the JSE on 14 October 2015 with the stated
R146 BILLION objective of growing in a number of core areas, including multi-
management, index-tracking, funds of hedge funds management,
DILUTED HEADLINE EARNINGS PER SHARE OF 25.76 CENTS investment administration and the umbrella fund market. The listing
itself was intended to help Sygnia enhance its public profile, brand
INTERIM DIVIDEND PER SHARE OF 25.00 CENTS recognition and general awareness in both the institutional and the
retail markets in South Africa in order to facilitate growth, as well as
Shareholders are advised that comparisons of headline earnings per to strengthen the balance sheet in pursuit of faster organic growth
share and diluted headline earnings per share to prior periods are and systems development strategies. The past six months have
distorted by the number of shares in issue as at 30 September 2015 involved a strong focus on execution in all the areas identified at the
and 31 March 2015 relative to 31 March 2016. The number of shares time of the listing.
in issue increased from 100 000 000 to 137 178 000 (+37.2%) due to
Sygnia Limited’s (“Sygnia”) listing on the Johannesburg Stock Exchange The key highlights of the achievements of each business area are
(“JSE”) in October 2015. described below.
FINANCIAL RESULTS INSTITUTIONAL MARKET
The past six month period to 31 March 2016 has been particularly Institutional assets under management and administration as at 31
challenging for most cyclical businesses, such as asset managers March 2016: R135.2 billion (March 2015: R112.4 billion)
and investment administrators, whose revenues depend on the Net inflows in the 12 months to 31 March 2016: R10.2 billion
value of assets under management and administration, and hence
are influenced by the vagaries of the investment markets. The The flow of assets into our multi-manager and funds of hedge funds
extraordinary volatility in the South African markets, as well as the products has been particularly pleasing. Some of this has been,
Rand, has directly reflected on the monthly volatility of earnings. Over unfortunately, offset by negative market movements and net outflows
the period, the FTSE/JSE All Share Index hit a high of 54 609 and a low from the investment administration division as a consequence of
of 46 282, eventually returning 5.6% for the period, driven largely by corporate retrenchments and restructuring in the broader economy
a recovery in commodity prices, the JSE All Bond Composite Index which have translated into withdrawals of savings from occupational
delivered -0.3%, the MSCI World Index 5.1% in US dollar terms and the retirement funds.
Rand depreciated to as low as R16.98/US$, before strengthening to
R14.65/US$ on 31 March 2016. Despite a challenging start to the year which benefitted asset managers
with significant commodity exposure, the Sygnia Signature product
Despite demanding market conditions, Sygnia grew its assets under range continued to perform well relative to its multi-manager peers:
management and administration by 20.7% to R146 billion (March 2015:
R121 billion) and its revenue by 19.7% relative to the same period to • Our flagship risk-profiled multi-manager products, the Sygnia Signature
31 March 2015. Net inflows over the 12 month period amounted to 40, 60 and 70 Funds, ranked 1st in terms of returns over 3 years and
R11.4 billion. 5 years in all their respective risk categories in the Alexander Forbes
Multi-Manager WatchTM Survey to 31 March 2016, while the Sygnia
Our embrace of the label of being a “market disruptor” has been Signature 50 Fund ranked 1st over 3 years and 2nd over 5 years.
successful in positioning Sygnia as a consumer champion, while
our focus on index-tracking investment strategies is slowly gaining • When compared to large single asset managers’ performances, as
market recognition. published in the Alexander Forbes Global Large Manager WatchTM
Survey to March 2016, the Sygnia Signature 70 Fund ranked 1st
Sygnia’s profit after tax grew by 19.4% relative to the same period to over 3 years and 2nd over 5 years. The significance of this lies in the
31 March 2015 despite a significant increase in operating expenses fact that multi-manager products can compete directly with single
associated with strategic expansion, the cost of the listing on the JSE asset managers’ products for top-level performance and can offer a
and a new acquisition. compelling alternative to the self-selection of single asset managers for
retirement funds.
The dilutionary effect of issuing 37 178 000 shares has resulted in
diluted headline earnings per share of 25.76 cents (March 2015: The index tracking multi-asset class products have also done well as
30.28 cents). active asset managers continued to struggle to outperform market
indices, with the flagship Sygnia Skeleton 70 Fund delivering gross-
of-fees returns of 5.51% over 1 year, 14.62% per annum over 3 years
and 16.18% per annum over 5 years to 31 March 2016.
In recognition of its 2015 performance Sygnia has been nominated NEW STRATEGIC INITIATIVES
for two industry awards at the 2016 Imbasa Yegolide Awards, the
Manager of Managers of the Year (Multi-Manager) and the Overall Sygnia Umbrella Retirement Fund
Investment / Asset Manager of the Year. Winners will be announced
in June 2016. Sygnia acquired the Gallet Employee Benefits Group with effect from
1 April 2016 in order to speed up its expansion into the umbrella
RETAIL MARKET fund market. Umbrella funds are increasingly becoming the vehicle
of choice used by companies to provide retirement benefits for
Retail assets under management as at 31 March 2016: R10.6 billion employees in place of stand-alone retirement fund arrangements.
(March 2015: R8.5 billion) This represents a significant growth opportunity for companies that
can provide competitive umbrella fund propositions. Apart from
Net inflows in the 12 months to 31 March 2016: R1.2 billion benefitting from the above trend, Sygnia also intends to disrupt the
existing umbrella fund market, estimated at R400 billion, by offering a
Sygnia’s retail business showed pleasing growth with a visible pick- more innovative, streamlined and cost-effective proposition.
up following the publicity associated with the listing and the growing
awareness of index-tracking as a plausible manner of managing assets. To that effect, the Sygnia Umbrella Retirement Fund (“SURF”) was
launched on 1 April 2016. SURF is revolutionary in that it offers both
Most significantly our LISP, launched in 2014, has grown both in-fund preservation and annuitisation with no need for members
in terms of assets and client numbers in a testament to Sygnia to leave SURF on retirement or termination of employment. Most
becoming more known among retail investors. Clients investing relevantly, they can retain their investments in institutionally-priced
through the Sygnia LISP stood at 4 907 as at 31 March 2016 (March investment products instead of being forced, by default, into costly
2015: 2 434, September 2015: 3 435). Assets under administration on unit trusts. SURF also reduces the overall charges associated with
the LISP grew to R4.33 billion (March 2015: R1.91 billion, September an umbrella fund proposition by approximately 70% relative to
2015: R3.00 billion). its peers. There are no consulting and no administration fees.
The only applicable fee is the asset management fee associated
The performance of Sygnia’s index tracking unit trusts has held up
with investments. This allows participating employers to appoint
well against actively managed peers:
independent financial advisors.
- The Sygnia Skeleton Balanced 70 Fund, a passively managed high-
Given the positive publicity SURF has enjoyed since its launch, we expect
equity multi-asset class unit trust, ranked 25th out of 115 unit trusts*,
this to be one of Sygnia’s significant drivers of growth going forward.
most of them actively managed, in the South African – Multi-Asset – High
Equity category since its inception in October 2013 to March 2016. Sygnia RoboAdvisor
- The Sygnia SWIX Index Fund, a passively managed equity unit trust, Sygnia has spent significant effort on developing the Sygnia
ranked 28th out of 124 unit trusts*, most of them actively managed, RoboAdvisor, a digital advisory platform launched on 16 May
in the South African – Equity – General category since its inception in 2016. To date this initiative has resulted in significant media and
October 2013 to March 2016. public interest. Going forward, the Sygnia RoboAdvisor provides an
alternative retail distribution channel for Sygnia’s low-cost index-
- The Sygnia Top 40 Index Fund, a passively managed equity unit
tracking products, and an advisory underpin to SURF. Based on
trust, ranked 6th out of 17 unit trusts*, most of them actively
international experience, this is likely to be of appeal to younger
managed, in the South African – Equity – Large Cap category since its
savers in search of simple and cost-effective investment options.
inception in November 2013 to March 2016.
Market Awareness
*Source: MoneyMate
Sygnia has appointed an advertising agency to enable it to gain
The retail division depends on robust infrastructure and hence Sygnia
broader public recognition through an advertising campaign to be
continued to invest in both people and systems in order to meet the
launched in the second half of 2016. We expect that the transition
rapid expansion of that area of the business.
from reliance on PR to broader advertising should increase the visibility
of Sygnia’s low-cost savings and investment product offerings.
TRANSFORMATION EXTERNAL AUDIT REVIEW
Sygnia is committed to being a representative South African The external auditors, KPMG Inc., reviewed the condensed consolidated
company. To that effect the company continues to promote the statement of financial position of Sygnia Limited Group as at 31
principles embodied in the Financial Sector Code across the March 2016 and the related condensed consolidated statement of
business. Broad-based staff ownership has been facilitated through comprehensive income, changes in equity and cash flows for the
listing the company on the Johannesburg Stock Exchange. Sygnia period then ended, and other explanatory notes. The review has been
Asset Management is certified as a Level 2 contributor in terms of the conducted in accordance with the International Standard on Review
Financial Services Sector Code. Shareholders are advised, however, Engagements 2410. Copies of the unmodified report of KPMG Inc. are
that the new Draft Amended Financial Services Sector Code gazetted available for inspection at the registered office of the company.
in March 2016 is substantially more demanding on all financial
services companies. This means that Sygnia will undertake new
initiatives to retain an acceptable level of compliance later in 2016.
This may include further measures to broaden its ownership base.
Magda Wierzycka
INTERIM CASH DIVIDEND Chief Executive Officer
Sygnia is committed to rewarding its shareholders with regular
distributions of free cash flow generated. Accounting for projected
cash requirements, a gross dividend (no 1) for the interim period
ended 31 March 2016 of 25.00 cents per share has been declared
out of income reserves, resulting in a net dividend of 21.25 cents per
share for shareholders subject to Dividends Tax (“DT”).
In compliance with the JSE Listings Requirements, the following dates
are applicable:
Last day to trade: Thursday, 9 June 2016
Shares trade ex dividend: Friday, 10 June 2016
Record date: Friday, 17 June 2016
Payment date: Monday, 20 June 2016
Share certificates may not be dematerialised or re-materialised
between, Friday, 10 June 2016 and Friday, 17 June 2016 both dates
inclusive. Dividends declared after 31 March 2012 are subject to
DT, where applicable. In terms of the DT, the following additional
information is disclosed:
– The local DT rate is 15%
– The number of ordinary shares in issue at the date of this
declaration is 137 178 000
– Sygnia’s tax reference number is 9334/221/16/6
INDEPENDENT AUDITOR’S REVIEW REPORT ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
TO THE SHAREHOLDERS OF SYGNIA LIMITED CONCLUSION
We have reviewed the condensed consolidated interim financial
Based on our review, nothing has come to our attention that causes
statements of Sygnia Limited contained in the accompanying
us to believe that the accompanying condensed consolidated interim
interim report, which comprise the condensed consolidated interim
financial statements of Sygnia Limited for the period ended 31 March
statement of financial position at 31 March 2016 and the condensed
2016 are not prepared, in all material respects, in accordance with
consolidated interim statements of profit or loss and other
International Financial Reporting Standard, IAS 34 Interim Financial
comprehensive income, changes in equity and cash flows for the
Reporting, the SAICA Financial Reporting Guides as issued by the
period then ended, and selected explanatory notes.
Accounting Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards Council and the
DIRECTORS’ RESPONSIBILITY FOR THE requirements of the Companies Act of South Africa.
INTERIM FINANCIAL STATEMENTS
KPMG Inc.
The Directors are responsible for the preparation and presentation
of these interim financial statements in accordance with International
Financial Reporting Standard, IAS 34 Interim Financial Reporting,
the SAICA Financial Reporting Guides, as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by the Per GM Pickering
Financial Reporting Standards Council and the requirements of the Chartered Accountant (SA)
Companies Act of South Africa, and for such internal control as the Registered Auditor
directors determine is necessary to enable the preparation of interim
25 May 2016
financial information that are free from material misstatement,
whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express a conclusion on these interim
financial statements. We conducted our review in accordance with
International Standard on Review Engagements (ISRE) 2410, Review
of Interim Financial Information Performed by the Independent
Auditor of the Entity. ISRE 2410 requires us to conclude whether
anything has come to our attention that causes us to believe that
the interim financial information are not prepared in all material
respects in accordance with the applicable financial reporting
framework. This standard also requires us to comply with relevant
ethical requirements.
A review of interim financial information in accordance with ISRE2410
is a limited assurance engagement. We perform procedures primarily
consisting of making inquiries of management and others within
the entity, as appropriate, and applying analytical procedures, and
evaluate the evidence obtained.
The procedures performed in a review are substantially less in
scope than and differ in nature from those performed in an audit
conducted in accordance with International Standards on Auditing.
Accordingly, we do not express an audit opinion on these interim
financial statements.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2016
RESTATED
NOTES REVIEWED AUDITED REVIEWED
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
ASSETS
Intangible assets 2 048 215 1 539 661 1 265 303
Deferred tax assets 3 412 068 3 857 822 2 834 095
Property and equipment 28 881 353 29 844 963 18 896 567
Investments linked to investment contract liabilities 12 32 877 516 210 27 631 242 783 25 541 071 269
Investments 12 252 501 147 67 358 495 63 642 270
Loans receivable 11 559 107 11 306 658 10 807 930
Taxation receivable 4 623 894 369 513 1 005 096
Trade and other receivables 35 479 599 29 665 198 41 156 496
Amounts owing by clearing houses 22 380 944 21 553 699 -
Amounts owing by clients 11 293 266 5 430 184 -
Cash and cash equivalents 323 270 788 102 030 889 66 274 569
TOTAL ASSETS 33 572 966 591 27 904 199 865 25 746 953 595
EQUITY
Stated capital 8 507 728 719 271 210 689 272 858 029
Retained income 126 314 277 91 397 091 91 039 245
Reserves (218 584 623) (219 299 987) (219 299 987)
TOTAL EQUITY 415 458 373 143 307 793 144 597 287
LIABILITIES
Deferred tax liabilities 28 053 239 27 049 808 12 323 335
Investment contract liabilities 12 32 153 983 559 26 914 802 175 25 120 724 290
Third-party liabilities arising on consolidation of unit trust funds 12 532 448 903 575 790 766 349 688 491
Taxation payable 1 023 462 1 389 780 3 346 560
Trade and other payables 408 323 477 200 131 900 114 218 401
Dividend payable - 2 550 000 2 055 231
Amounts owing to clients 33 675 578 31 578 463 -
Bank overdraft - 7 599 180 -
TOTAL LIABILITIES 33 157 508 218 27 760 892 072 25 602 356 308
TOTAL EQUITY AND LIABILITIES 33 572 966 591 27 904 199 865 25 746 953 595
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX
MONTHS ENDED 31 MARCH 2016
NOTES REVIEWED AUDITED REVIEWED
SIX MONTHS FOR THE YEAR SIX MONTHS
ENDED ENDED ENDED
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
Revenue 131 390 508 234 050 879 109 788 436
Expenses (93 727 985) (160 607 113) (77 146 672)
Investment contract income 1 789 689 433 2 502 390 290 2 263 687 807
Transfer to investment contract liabilities (1 789 689 433) (2 502 390 290) (2 263 687 807)
Interest income 8 590 038 6 496 655 2 601 758
Other investment income 4 069 049 4 040 848 5 610 964
Fair value adjustment to third-party liabilities (1 699 243) - -
PROFIT FROM OPERATIONS 48 622 367 83 981 269 40 854 486
Finance costs (350 897) (445 297) (196 071)
PROFIT BEFORE TAX 48 271 470 83 535 972 40 658 415
Income tax expense (13 354 284) (24 224 013) (11 404 302)
TOTAL PROFIT AND COMPREHENSIVE INCOME FOR 34 917 186 59 311 959 29 254 113
THE PERIOD
EARNINGS PER SHARE (CENTS) 9
- Basic 25.83 59.31 29.25
- Diluted 25.76 59.31 29.25
HEADLINE EARNINGS PER SHARE (CENTS)
- Basic 25.83 60.40 30.28
- Diluted 25.76 60.40 30.28
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 MARCH 2016
STATED COMMON CONTROL ROUP EQUITY SHARE-BASED RETAINED TOTAL
CAPITAL RESERVE ADJUSTMENT PAYMENT RESERVE INCOME EQUITY
R R R R R R
BALANCE AT 1 OCTOBER 2014 - AUDITED 272 858 029 (252 576 998) (307 062) 33 584 073 73 152 837 126 710 879
Total comprehensive income
Total profit and comprehensive income for the period - - - - 29 254 113 29 254 113
Total comprehensive income for the period - - - - 29 254 113 29 254 113
Transactions with owners
Dividends paid - - - - (11 367 705) (11 367 705)
Total transactions with owners - - - - (11 367 705) (11 367 705)
BALANCE AT 31 MARCH 2015 - REVIEWED 272 858 029 (252 576 998) (307 062) 33 584 073 91 039 245 144 597 287
Total comprehensive income
Total profit and comprehensive income for the period - - - - 30 057 846 30 057 846
Total comprehensive income for the period - - - - 30 057 846 30 057 846
Transactions with owners
Dividends paid - - - - (29 700 000) (29 700 000)
Transaction costs on issue of ordinary shares (1 647 340) - - - - (1 647 340)
Total transactions with owners m (1 647 340) - - - (29 700 000) (31 347 340)
BALANCE AT 30 SEPTEMBER 2015 - AUDITED 271 210 689 (252 576 998) (307 062) 33 584 073 91 397 091 143 307 793
Total comprehensive income
Total profit and comprehensive income for the period - - - - 34 917 186 34 917 186
Total comprehensive income for the period - - - - 34 917 186 34 917 186
Transactions with owners
Share issue 237 256 606 - - - - 237 256 606
Share option expense - - - 715 364 - 715 364
Transaction costs on issue of ordinary shares (738 576) - - - - (738 576)
Total transactions with owners 236 518 030 - - 715 364 - 237 233 394
BALANCE AT 31 MARCH 2016 - REVIEWED 507 728 719 (252 576 998) (307 062) 34 299 437 126 314 277 415 458 373
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 MARCH 2016
RESTATED
REVIEWED AUDITED REVIEWED
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 48 271 470 83 535 972 40 658 415
Non-cash movements and adjustments to profit before tax * (8 053 779) (2 295 838) 5 699 710
Changes in working capital 149 747 540 145 039 175 48 227 259
Cash utilised by policyholder activities (5 199 931) (91 813 355) (44 718 331)
Dividends received 467 432 768 478 364 603
Interest received 9 250 601 6 547 843 2 601 758
Interest paid (350 897) (445 297) (196 071)
Taxation paid (16 525 798) (27 228 492) (10 711 418)
NET CASH INFLOW FROM OPERATING ACTIVITIES 177 606 638 114 108 486 41 925 925
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (2 594 790) (17 095 471) (3 654 973)
Additions to intangible assets (1 057 626) (2 360 828) (1 570 468)
Net purchases of investments (181 633 173) (3 415 145) (2 417 923)
Proceeds on disposals of equipment - 1 486 381 1 486 382
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (185 285 589) (21 385 063) (6 156 982)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid - (38 517 705) (11 367 705)
Issue of ordinary shares 237 256 606 - -
Transaction costs on issue of ordinary shares (738 576) (1 647 340) -
NET CASH INFLOW / (OUTFLOW) FROM FINANCING
236 518 030 (40 165 045) (11 367 705)
ACTIVITIES
NET INCREASE IN CASH AND CASH EQUIVALENTS 228 839 079 52 558 378 24 401 238
Cash and cash equivalents at beginning of the period 94 431 709 41 873 331 41 873 331
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 323 270 788 94 431 709 66 274 569
Cash and cash equivalents at the end of the period included the following 164 120 980 48 799 693 22 910 541
cash held on behalf of policyholders and customers
Note to the statement of cash flows:
Cash held in overnight settlement accounts on behalf of policyholders of Sygnia Life and customers of Sygnia Securities is included on the face
of the balance sheet under “Cash and cash equivalents” with a corresponding payable to clients. This results in the movement in these cash
amounts being disclosed in the statement of cash flows. Changes in these amounts are shown under the “Changes in working capital”, under
the “Cash Flows from Operating Activities” section on the statement of cash flows. These cash amounts fluctuate on a daily basis and can result in
significant fluctuations if comparing “Changes in working capital” between reporting periods.
* Non-cash movements and adjustments to profit before tax include depreciation, amortisation, fair value adjustments to investments and share based
payment expense.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH 2016
1. REPORTING ENTITY to investments linked to investment contract liabilities in the financial
statements for the year ended 30 September 2015, as the Group
Sygnia Limited is a company domiciled in the Republic of South Africa. believes this disclosure better reflects the nature of these assets and is
The condensed consolidated interim financial statements (“interim in line with industry best practice. The reclassification impacts the interim
financial statements”) as at, and for the six months, ended 31 March comparative amounts previously presented as follows: ‘Investments
2016 comprise the company, its subsidiaries and consolidated linked to investment contract liabilities’ increases by R162 987 550 and
unit trust funds (together referred to as “the Group”). The Group is ‘Trade and other receivables’ decreases by R162 987 550. The net effect
primarily involved in the provision of investment management and on the statement of financial position is nil.
administration related services.
The Group also elected to reclassify cash flows in relation to investment
Sygnia Limited listed on the Johannesburg Stock Exchange (“JSE”) on contracts for the period ended 31 March 2015. Previously ‘Net
14 October 2015. purchases of investment linked to investment contract liabilities’ and
‘Policyholder investment contracts’ were disclosed on the face of the
2. BASIS OF PREPARATION statement of cash flows as ‘Cash flows from investing activities’ and
‘Cash flows from financing activities’ respectively. The amount is now
The interim financial statements are prepared in accordance disclosed as cash flows from operating activities and grouped together
with International Financial Reporting Standard (IFRS), IAS 34 with all other cash flow items relating to policyholder investment
Interim Financial Reporting, the SAICA Financial Reporting Guides contracts in order to better present the movement in policyholder
as issued by the Accounting Practices Committee and Financial investment contracts. These amounts are included in ‘cash utilised by
Pronouncements as issued by the Financial Reporting Standards policyholder activities’ on the face of the statement of cash flows. The
Council, the requirements of the Companies Act 71 of 2008 of reclassification impacts the comparative amounts previously presented
South Africa and the JSE Listings Requirements. in the interim statement of cash flows for the period ended 31 March
2015 as follows: ‘Net purchases of investment linked to investment
The interim financial statements have been prepared on the basis of contract liabilities’ increases by R3 741 609 191 to Rnil and ‘Policyholder
accounting policies applicable to a going concern. The basis presumes investment contracts’ decreases by R3 696 890 860 to Rnil. The net
that funds will be available to finance future operations and that the financial effect on the statement of cash flows is nil.
realisation of assets and settlement of liabilities, contingent obligations
and commitments will occur in the ordinary course of business. 4. INTERIM PRIOR PERIOD ERROR
The interim financial statements are presented in South African Rands, The Group did not consolidate two unit trust funds over which it had
which is the functional currency of the Group. control in its interim financial statements for the period ended
31 March 2015. These unit trust funds were consolidated in the
The interim financial statements have been prepared on the historical financial statements for the year ended 30 September 2015 and
cost basis, except for the measurement of certain financial instruments have been consolidated in these interim financial statements. The
which are measured at fair value. The principal accounting policies set inclusions of these unit trust funds in the comparative figures as at 31
out below have, unless otherwise stated, been applied consistently to March 2015 and in these interim financial statements are as follows:
all periods presented in these financial statements. investments linked to investment contract liabilities in the statement of
financial position has increased by R349 688 491 with a corresponding
The condensed consolidated interim financial statements do not increase in third-party liabilities arising on consolidation of unit trust
include all of the information required for full annual financial funds of R349 688 491. The error had no impact on the statement of
statements and should be read in conjunction with the consolidated profit or loss and other comprehensive income, statement of changes
financial statements of the Group as at and for the year ended in equity or statement of cash flows.
30 September 2015.
These condensed consolidated interim financial statements have been
prepared under the supervision of the Financial Director, NJ Giles CA(SA).
3. PRIOR INTERIM PERIOD RECLASSIFICATION
The Group previously disclosed investment contract portfolio debtors
and accrued interest as part of trade and other receivables in the
interim financial statements for the period ended 31 March 2015. The
Group reclassified investment contract portfolio debtors and investment
contract portfolio accrued interest from trade and other receivables
5. ACCOUNTING POLICIES 7. SEGMENT INFORMATION
The accounting policies applied in the preparation of these condensed The Group has identified Sygnia’s Executive Committee as the
consolidated interim financial statements conform to IFRS and are Chief Operating Decision Maker (CODM). The responsibility of the
consistent with those accounting policies applied in the preparation of executive committee is to assess performance and to make resource
the consolidated financial statements as at and for the year ended allocation decisions across the Group. The Group provides investment
30 September 2015. management and administration services to institutional and retail
clients predominantly located in South Africa. No disaggregated
The following new or revised IFRSs and interpretations that are information is provided to the CODM on the separate operations of
applicable to the Group have effective dates applicable to future the Group, and the CODM assesses operating performance and makes
financial years and have not been early adopted: resource decisions about the Group based on the combined results
of these operations. The Group has therefore concluded that the
IFRS 9 – Financial Instruments combined operations of the Group constitute one operating segment.
(effective 1 January 2018)
IFRS 15 – Revenue from Contracts with Customers
(effective 1 January 2018)
IFRS 16 - Leases
(effective 1 January 2019)
IAS 1 - Disclosure intiative amendments
(effective 1 January 2016)
The impact of the application of these revised standards and
interpretations in future financial reporting periods on the Group’s
reported results, financial position and cash flows is still being assessed.
Share-based payments
The Group grants share options to certain employees under an equity-
settled share-based compensation scheme.
Equity-settled share-based payments are measured at fair value at the
grant date. The fair value determined at the grant date of the equity-
settled share-based payments is expensed, with a corresponding
increase in equity, on a straight-line basis over the vesting period
based on management’s estimate of the shares that will vest and
adjusted for the effect of non market-based vesting conditions.
These share-based payments are not subsequently revalued.
6. USE OF ESTIMATES AND JUDGEMENTS
In preparing these condensed consolidated interim financial statements,
the significant judgements made by management in applying the
Group’s accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements for the year ended 30 September 2015, except
for estimates relating to the share based payments during the current
reporting period. The valuation of the share based payment expense is
a key area of judgement where inputs based on observable market data
are used to estimate the fair value of the share based payment. Please
refer to note 10 for more information.
8. STATED CAPITAL
NUMBER OF STATED
SHARES CAPITAL
R
Authorised
500,000,000 Ordinary shares of no par value
(September 2015: 500,000,000 Ordinary shares of no par value)
ISSUED
As at 1 October 2014 200 2 858 029
Share split 59 999 800 -
Issue of ordinary shares 40 000 000 270 000 000
As at 31 March 2015 - Reviewed 100 000 000 272 858 029
Transaction costs on issue of ordinary shares - (1 647 340)
As at 30 September 2015 - Audited 100 000 000 271 210 689
Issue of ordinary shares - 1 October 2015 * 8 933 166 -
Issue of ordinary shares - 14 October 2015 * 28 244 834 237 256 606
Transaction costs on issue of ordinary shares - (738 576)
AS AT 31 MARCH 2016 - REVIEWED 137 178 000 507 728 719
The unissued shares at 31 March 2016 are under the control of the directors until the next annual general meeting. The directors are authorised
to buy back shares under general approval subject to certain limitations and the JSE listing requirements.
* The issue of ordinary shares on 1 October 2015 and 14 October 2015 relate to the Ulundi Settlement and Private Placement respectively.
Please refer to Sygnia Limited’s Pre-Listing statement issued on 1 October 2015 for more information.
9. EARNINGS AND HEADLINE EARNINGS PER SHARE
REVIEWED AUDITED REVIEWED
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
Profit attributable to ordinary shareholders 34 917 186 59 311 959 29 254 113
Non-headline items (net of tax)
- Loss on disposal of furniture and equipment - 48 138 48 138
- Impairment of intangible assets - 1 037 017 976 072
HEADLINE EARNINGS 34 917 186 60 397 114 30 278 323
Number of shares issued 137 178 000 100 000 000 100 000 000
Weighted average number of shares (basic) 135 171 536 100 000 000 100 000 000
Weighted average number of shares (diluted) 135 540 954 100 000 000 100 000 000
EARNINGS PER SHARE CENTS CENTS CENTS
Earnings per share (basic) 25.83 59.31 29.25
Earnings per share (diluted) 25.76 59.31 29.25
Headline earnings per share (basic) 25.83 60.40 30.28
Headline earnings per share (diluted) 25.76 60.40 30.28
Net asset value per share (cents) 302.86 143.31 144.60
Tangible net asset value per share (cents) 299.74 138.09 140.50
10. SHARE BASED PAYMENT
During the period Sygnia made an offer to participants of the employee share option scheme to acquire ordinary shares in Sygnia Limited. The
options shall be exercisable as follows: 20% shall be excercisable on the third anniversary of the option date, 30% on the fourth anniversary of
the option date and 50% on the fifth anniversary of the option date. Options exercised by participants once the minimum date has passed will be
settled by the issue of shares in Sygnia Limited. If a participant ceases to be employed by the Group, all options of the participant are forfeited.
For the six months ended 31 March 2016, the Group has recognised R715 364 as a share-based payment expense in the statement of profit or
loss and other comprehensive income (30 September 2015: Rnil; 31 March 2015: Rnil).
Allocation date 1 October 2015 1 February 2016
Number of shares 2 595 242 217 413
Vesting period 1 October 2015 to 30 September 2020 1 February 2016 to 31 January 2021
Strike price 5.04 13.80
Value of option 2.63 4.84
The value of the option represents the fair value on grant date in accordance with IFRS
The option was valued using a Finite Difference Scheme under Geometric Brownian motion option pricing model with the following inputs.
Weighted average expected volatility (%) 26.57% 37.47%
Weighted average option life (years) 5.30 5.30
Weighted average dividend yield (%) 7.01% 5.34%
Weighted average risk-free interest rate (%) 7.83% 8.39%
Weighted average vesting period (years) 4.30 4.30
REVIEWED AUDITED REVIEWED
DETAILS OF NUMBER OF SHARE OPTIONS DURING 31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
THE PERIOD
At beginning of period - - -
Allocated during the period 2 812 655 - -
Forfeited during the period (416 667) - -
Exercised during the period - - -
AT END OF PERIOD 2 395 988 - -
As part of the listing process, Sygnia issued 70 210 ordinary shares to 59 staff members at no cost. This resulted in the Group recognising an
expense of R589 764 in relation to this.
11. CAPITAL COMMITMENTS
REVIEWED AUDITED REVIEWED
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
Operating lease commitments
- Up to 1 year 10 911 175 10 655 886 10 414 550
- 1 to 5 years 31 202 154 36 686 148 40 288 410
- More than 5 years - - -
42 113 329 47 342 034 50 702 960
The operating lease commitments represent the total future minimum lease payments under non-cancellable operating leases.
12. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including price risk, foreign currency risk, cash flow risk and fair value
interest rate risks), credit risk and liquidity risk. The condensed consolidated interim financial statements do not include all risk management
information and disclosure required in the annual financial statements and should be read in conjunction with the Group’s financial statements
for the year ended 30 September 2015.
The Group’s financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the
year ended 30 September 2015.
Capital risk management
The capital risk management philosophy is to maximise the return on shareholders’ capital within an appropriate risk framework.
Some of the Group’s subsidiaries are regulated businesses with capital requirements that are set out by legislation. The adequacy percentage of
capital is monitored by management on a regular basis and the position reported to the Financial Services Board. The various subsidiaries met
the capital and liquidity requirements at 31 March 2016.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligation or incur a change in its creditworthiness, resulting in a
financial loss to the Group. The Group has no significant concentration of credit risk. The Group has policies in place to ensure that it deals with
clients with an appropriate credit history. Cash resources and longer term investments are limited to high credit quality financial institutions.
The Group has policies in place to limit the credit exposure to any one financial institution. The Group has a history of very few bad debts. The
liability to policyholders and third-party liabilities arising on consolidation of unit trust funds are linked to the value of the assets held. Credit risk is
therefore assumed by the policyholder and third-party. There were no impairments to financial assets during the reporting period.
Liquidity risk
Liquidity risk is the risk that cash may not be available to pay obligations when due at a reasonable cost. Prudent liquidity risk management
implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. The group manages
its liquidity requirements by monitoring forecasted cash flows. The liquidity risk associated with the Group being contractually obligated to repay
policyholders and third-party liabilities arising on consolidation of unit trust funds on demand is managed through the investment composition
of assets included in the policyholder portfolios and unit trust funds and by contract with the policyholders. Such contracts mitigate the liquidity
risk faced by the Group and passes this on to policyholders and unit holders in the ordinary course of business and in the event that substantial
withdrawals require large scale disinvestment of the assets in these portfolios.
Cash flow and interest rate risk
The Group’s income and cash flows are based mainly on contractual asset management and administration fees. The Group does not have any
variable-rate borrowings. The Group’s policy is to monitor cash requirement and invest surplus cash at variable-rates where appropriate.
Market risk, interest rate risk and currency risk
Market risk is the potential impact on earnings of unfavourable changes in foreign exchange rates, interest rates, prices, market volatilities and
liquidity. A large portion of the group’s income is derived from fees levied on the market value of the investments that it manages and administers.
As the fees are dependent on the daily market value of the investments, any market movements affect the group accordingly. Market risk is
mitigated through the diversification of investment mandates such that revenue is not overly exposed to any single sector of the investment market.
Investment management capacity is monitored to ensure that the performance of a specific investment is not unduly compromised through
excessive scale.
The main market risk faced by the Group is the effect of volatility in equity markets on its capital investments in collective investment schemes
and listed equities and changes in interest rates on its bank accounts.
The investment price risk analysis reflects the sensitivity of the Group’s underlying constituents with that of its Index underlying constituents
on market capitalisation at the reporting date. The analysis is based on the assumption that the JSE/FTSE All Share Index was increased and
decreased by 5% with all other variables held constant.
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
5% increase index
Profit after taxation and equity 8 450 877 2 613 510 2 469 320
5% decrease index
Profit after taxation and equity (8 450 877) (2 613 510) (2 469 320)
The Group is exposed to interest rate risk through its loans receivable, fixed deposits and current accounts with various local banking institutions.
The impact of a 100 basis point move in local interest rates at reporting date would have increased / decreased profits or loss after taxation and
equity as follows:
31 MARCH 2016 30 SEPTEMBER 2015 31 MARCH 2015
R R R
100 basis point increase in interest rates
Profit after taxation and equity 1 264 897 432 766 242 773
100 basis point decrease in interest rates
Profit after taxation and equity (1 264 897) (432 766) (242 773)
Statement of financial position (Corporate vs. Third party)
A subsidiary of the Group, Sygnia Life Limited is a linked insurance company and issues linked policies to policyholders (where the value of policy benefit is directly linked to the fair value of the supporting assets), and as such does not expose the business to the market risk of fair value
adjustments on the financial asset as this risk is assumed by the policyholder. Sygnia Securities Proprietary Limited (subsidiary) provides stockbroking services to clients which results in significant working capital fluctuations due to the timing of the close of the JSE in terms of client settlements.
The unsettled exchange traded transactions are represented by money owed to clients and held with the JSE Trustees. Similarly cash held in settlement accounts on behalf of clients related to the abovementioned subsidiaries are considered as third party balances.
In order to evaluate the consolidated financial position, the Group segregates the statement of financial position and the statement of profit or loss and other comprehensive income between corporate (own balances) and third party (client-related balances).
Third party balances represent the investment contract liabilities and related linked client assets of Sygnia Life Limited, the related portfolio debtors and creditors accounts, deferred taxation, unsettled trades and related bank accounts as well as third party liabilities and assets arising on
consolidation of unit trust funds. Client balances in Sygnia Securities Proprietary Limited due to unsettled trades and cash held in settlement accounts on behalf of clients are included in third party balances.
REVIEWED - AS AT 31 MARCH 2016 AUDITED - AS AT 30 SEPTEMBER 2015 RESTATED REVIEWED - AS AT 31 MARCH 2015
CORPORATE THIRD PARTY CORPORATE THIRD PARTY CORPORATE THIRD PARTY
TOTAL BALANCES BALANCES TOTAL BALANCES BALANCES TOTAL BALANCES BALANCES
R R R R R R R R R
ASSETS
Intangible assets 2 048 215 2 048 215 - 1 539 661 1 539 661 - 1 265 303 1 265 303 -
Deferred tax assets 3 412 068 3 412 068 - 3 857 822 3 857 822 - 2 834 095 2 834 095 -
Property and equipment 28 881 353 28 881 353 - 29 844 963 29 844 963 - 18 896 567 18 896 567 -
Investments linked to investment contract liabilities 32 877 516 210 - 32 877 516 210 27 631 242 783 - 27 631 242 783 25 541 071 269 - 25 541 071 269
Investments 252 501 147 207 534 539 44 966 608 67 358 495 67 358 495 - 63 642 270 63 642 270 -
Loans receivable 11 559 107 11 559 107 - 11 306 658 11 306 658 - 10 807 930 10 807 930 -
Taxation receivable 4 623 894 4 623 894 - 369 513 369 513 - 1 005 096 1 005 096 -
Trade and other receivables 35 479 599 35 317 075 162 524 29 665 198 29 665 198 - 41 156 496 41 156 496 -
Amounts owing by clearing houses 22 380 944 - 22 380 944 21 553 699 - 21 553 699 - - -
Amounts owing by clients 11 293 266 - 11 293 266 5 430 184 - 5 430 184 - - -
Cash and cash equivalents 323 270 788 159 149 808 164 120 980 102 030 889 53 231 196 48 799 693 66 274 569 43 364 028 22 910 541
TOTAL ASSETS 33 572 966 591 452 526 059 33 120 440 532 27 904 199 865 197 173 506 27 707 026 359 25 746 953 595 182 971 785 25 563 981 810
EQUITY
Equity attributable to owners of the parent 415 458 373 415 458 373 - 143 307 793 143 307 793 - 144 597 287 144 597 287 -
TOTAL EQUITY 415 458 373 415 458 373 - 143 307 793 143 307 793 - 144 597 287 144 597 287 -
LIABILITIES
Deferred tax liabilities 28 053 239 1 179 565 26 873 674 27 049 808 176 134 26 873 674 12 323 335 1 528 572 10 794 763
Investment contract liabilities 32 153 983 559 - 32 153 983 559 26 914 802 175 - 26 914 802 175 25 120 724 290 - 25 120 724 290
Third-party liabilities arising on consolidation of unit trust funds 532 448 903 - 532 448 903 575 790 766 - 575 790 766 349 688 491 - 349 688 491
Taxation payable 1 023 462 1 023 462 - 1 389 780 1 389 780 - 3 346 560 3 346 560 -
Trade and other payables 408 323 477 34 864 659 373 458 818 200 131 900 42 150 619 157 981 281 114 218 401 31 444 135 82 774 266
Dividend payable - - - 2 550 000 2 550 000 - 2 055 231 2 055 231 -
Amounts owing to clients 33 675 578 - 33 675 578 31 578 463 - 31 578 463 - - -
Bank overdraft - - - 7 599 180 7 599 180 - - - -
TOTAL LIABILITIES 33 157 508 218 37 067 686 33 120 440 532 27 760 892 072 53 865 713 27 707 026 359 25 602 356 308 38 374 498 25 563 981 810
TOTAL EQUITY AND LIABILITIES 33 572 966 591 452 526 059 33 120 440 532 27 904 199 865 197 173 506 27 707 026 359 25 746 953 595 182 971 785 25 563 981 810
Statement of comprehensive income (Corporate vs Third party)
In order to evaluate the consolidated comprehensive income of the Group, the Group segregates the statement of comprehensive income between Corporate transactions and Third party transactions.
Where consolidation of unit trust funds occurs by virtue of the Group’s investment into the fund, the income and expenditure components are disclosed in the statement of profit or loss and other comprehensive income as well as the third-party share thereof. These amounts are included
in Third party transactions.
REVIEWED - AS AT 31 MARCH 2016 AUDITED - AS AT 30 SEPTEMBER 2015 RESTATED REVIEWED - AS AT 31 MARCH 2015
TOTAL CORPORATE THIRD PARTY TOTAL CORPORATE THIRD PARTY TOTAL CORPORATE THIRD PARTY
R R R R R R R R R
Revenue 131 390 508 131 390 508 - 234 050 879 234 050 879 - 109 788 436 109 788 436 -
Expenses (93 727 985) (93 466 764) (261 221) (160 607 113) (160 607 113) - (77 146 672) (77 146 672) -
Investment contract income 1 789 689 433 - 1 789 689 433 2 502 390 290 - 2 502 390 290 2 263 687 807 - 2 263 687 807
Transfer to investment contract liabilities (1 789 689 433) - (1 789 689 433) (2 502 390 290) - (2 502 390 290) (2 263 687 807) - (2 263 687 807)
Interest income 8 590 038 6 928 681 1 661 357 6 496 655 6 496 655 - 2 601 758 2 601 758 -
Other investment income 4 069 049 3 769 942 299 107 4 040 848 4 040 848 - 5 610 964 5 610 964 -
Fair value adjustment to third-party liabilities (1 699 243) - (1 699 243) - - - - - -
PROFIT FROM OPERATIONS 48 622 367 48 622 367 - 83 981 269 83 981 269 - 40 854 486 40 854 486 -
Finance costs (350 897) (350 897) - (445 297) (445 297) - (196 071) (196 071) -
PROFIT BEFORE TAXATION 48 271 470 48 271 470 - 83 535 972 83 535 972 - 40 658 415 40 658 415 -
Income tax expense (13 354 284) (13 354 284) - (24 224 013) (24 224 013) - (11 404 302) (11 404 302) -
TOTAL PROFIT AND COMPREHENSIVE INCOME FOR THE PERIOD 34 917 186 34 917 186 - 59 311 959 59 311 959 - 29 254 113 29 254 113 -
13. FAIR VALUE
The fair values of all financial instruments approximate the carrying values reflected in the statement of financial position.
Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into
Levels 1 to 3 based on the degree to which the fair value is observable.
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
There have been no transfers between level 1, 2 or 3 during the period under review.
The table below analyses financial assets and liabilities, which are carried at fair value, in the statement of financial position. There were no
significant changes in the valuation method and assumptions applied since 30 September 2015.
REVIEWED LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT R R R R
OR LOSS AS AT 31 MARCH 2016
Investments linked to investment contracts 13 258 727 929 19 618 788 281 - 32 877 516 210
Investments (Corporate) 60 289 285 192 211 862 - 252 501 147
13 319 017 214 19 811 000 143 - 33 130 017 357
REVIEWED
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT
OR LOSS
AS AT 31 MARCH 2016
Investment contract liabilities 13 258 727 929 18 895 255 630 - 32 153 983 559
13 258 727 929 18 895 255 630 - 32 153 983 559
AUDITED
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT
OR LOSS AS AT 30 SEPTEMBER 2015
Investments linked to investment contracts 11 679 518 377 15 951 724 406 - 27 631 242 783
Investments (Corporate) 5 395 575 61 962 920 - 67 358 495
11 684 913 952 16 013 687 326 - 27 698 601 278
AUDITED
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT
OR LOSS AS AT 30 SEPTEMBER 2015
Investment contract liabilities 11 679 518 377 15 235 283 798 - 26 914 802 175
11 679 518 377 15 235 283 798 - 26 914 802 175
REVIEWED
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT
OR LOSS AS AT 31 MARCH 2015
Investments linked to investment contracts 10 050 034 528 15 491 036 741 - 25 541 071 269
Investments (Corporate) 6 478 449 57 163 821 - 63 642 270
10 056 512 977 15 548 200 562 - 25 604 713 539
REVIEWED
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT
OR LOSS AS AT 31 MARCH 2015
Investment contract liabilities 10 050 034 528 15 070 689 762 - 25 120 724 290
10 050 034 528 15 070 689 762 - 25 120 724 290
14. RELATED PARTY TRANSACTIONS
Related-party transactions similar to those disclosed in the Group’s financial statements for the year ended 30 September 2015 took place during
the period under review, except for the following:
Transaction with shareholder of subsidiary
On 1 October 2015 and in terms of the Ulundi settlement, Sygnia Asset Management Proprietary Limited, a 100% held subsidiary of Sygnia
Limited (80% September 2015), repurchased a portion of its shares held by Ulundi Holdings Propretary Limited for a purchase consideration
of R14 293 066 less related debt. Sygnia Limited, in terms of a share for share exchange, issued 8 933 166 ordinary shares in Sygnia Limited to
Ulundi Holdings Proprietary Limited in exchange for its remaining shareholding in Sygnia Asset Management Proprietary Limited. Please refer to
the Pre-listing Statement of Sygnia Limited issued on 1 October 2015 for more information.
Share-based options granted to directors
On 14 October 2015, Sygnia Limited made an offer, in terms of the employee share option scheme, to NJ Giles to acquire 178 571 ordinary shares.
Please refer to note 10 for more information.
Issue of Shares
As part of the listing process, dependants of MF Wierzycka and NJ Giles subscribed to 11 904 and 2 380 Sygnia Limited shares at the Private Placing
Price of R8.40 per share.
15. EVENTS AFTER THE REPORTING PERIOD
The directors are not aware of any matter or circumstances, other than listed below, arising since the end of the financial period, not otherwise
dealt with in the interim financial statements, which significantly affect the financial position of the Group or the results of their operations:
Gallet Group Acquisition
Sygnia Limited made an offer to purchase the entire issued share capital of Gallet Group Employee Benefits Proprietary Limited (“Gallet”) from the
shareholders of Gallet, being CS Beck, The BC 1949 Trust, NA Karani-Desbois and JL Simpson (“the acquisition”). The acquisition was subject to the
fulfilment of conditions precedent, as well as obtaining the required regulatory approvals. Gallet is an authorised financial services provider that
focuses primarily on the provision of employee benefit consulting, payroll services and liability administration to South African retirement funds.
In addition, Gallet is a sponsor, consultant and administrator of the Setshaba Pension and Provident Funds, a well-established umbrella fund
solution. As at 31 December 2015 Gallet had R5 billion in assets under advice and administration. The acquisition of Gallet facilitates the Group
offering umbrella fund services, as per its stated strategic objective. The Group can leverage off Gallet’s administration systems, processes and
a highly experienced team to offer umbrella fund services more effectively to the retirement fund market. The Group has provided investment
administration and asset management services to some of Gallet’s clients, including the Setshaba Funds, since 2008 and the systems and
processes of the two companies are already integrated. It is the intention of the Group to rebrand the Setshaba Funds to the Sygnia Umbrella
Retirement Fund (“SURF”) when regulatory approval has been obtained. After the reporting period, all conditions precedent were fulfilled and the
agreement to acquire Gallet has become effective.
Interim Dividend
The board approved and declared a gross interim dividend of 25c per share on 24 May 2016 from income reserves for the six months ended 31
March 2016.
SYGNIA LIMITED Registration Number: 2007/025416/06 23
SYGNIA LIMITED
INCORPORATED IN
THE REPUBLIC OF
SOUTH AFRICA
REGISTRATION NUMBER:
2007/025416/06
JSE SHARE CODE: SYG
ISIN CODE: ZAE0002088015
(“SYGNIA” OR “THE COMPANY” OR
“THE GROUP”)
CAPE TOWN
7th Floor, The Foundry
Cardiff Street
Green Point
8001
South Africa
T: +27(0) 21 446 4940
F: +27(0) 21 446 4950
E: info@sygnia.co.za
JOHANNESBURG
Unit 40, 6th Floor
Katherine and West building
West Street
Sandton
2196
T: +27 (0) 10 595 0550
F: +27 (0) 86 206 5173
E: info@sygnia.co.za
WWW.SYGNIA.CO.ZA
Date: 26/05/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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