Abridged Audited Results For The Year Ended 31 December 2016 - DBXUS The db X-trackers Collective Investment Scheme db x-trackers MSCI USA Trust JSE code: DBXUS ISIN: ZAE000115192 A portfolio in the db x-trackers Collective Investment Scheme (db x- trackers), registered as such in terms of the Collective Investment Schemes Control Act, 45 of 2002 (CISCA) ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2016 2016 2015 R R Revenue 515 484 958 76 444 652 Investment income 103 149 551 76 442 060 Foreign exchange gain on dividends - 2 592 Net fair value gain on investments at fair value through profit or loss 412 335 407 - Expenses (36 160 463) (52 250 091) Management and administrative expenses (36 137 859) (26 704 732) Foreign exchange loss on dividends (22 604) - Net fair value loss on investments at fair value through profit or loss - (25 519 431) Finance costs - (25 928) Operating profit before distribution 479 324 495 24 194 561 Comprising: Income available for distribution before tax 66 989 088 49 713 992 Capital gain/(loss) retained 412 335 407 (25 519 431) Distributions (48 295 669) (48 674 345) Increase/(decrease) in net assets attributable to holders of redeemable securities before tax 431 028 826 (24 479 784) Withholding tax (15 783 525) (11 155 997) Increase/(decrease) in net assets attributable to holders of redeemable securities 415 245 301 (35 635 781) 2 STATEMENT OF FINANCIAL POSITION at 31 December 2016 2016 2015 R R Assets Listed investments held at fair value through profit or loss 4 441 523 450 4 800 100 756 Trade and other receivables 4 877 639 5 403 497 Cash and cash equivalents 37 241 792 53 831 820 Total assets 4 483 642 881 4 859 336 073 Liabilities Net assets attributable to holders of redeemable securities 4 442 721 575 4 808 933 486 Trade and other payables 40 921 306 50 402 587 Total liabilities 4 483 642 881 4 859 336 073 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SECURITIES for the year ended 31 December 2016 Total R Balance at 1 January 2015 2 715 129 369 Decrease in net assets attributable to holders of redeemable securities (35 635 781) Creations of redeemable securities 964 682 934 Foreign currency translation adjustments 1 164 756 964 attributable to redeemable securities Balance at 31 December 2015 4 808 933 486 Creation of redeemable securities 263 465 187 Increase in net assets attributable to holders of redeemable securities 415 245 301 Redemption of securities (441 121 057) Foreign currency translation adjustments (603 801 342) attributable to redeemable securities 4 442 721 575 Balance at 31 December 2016 3 STATEMENT OF CASH FLOWS for the year ended 31 December 2016 2016 2015 R R Cash utilised by operations (16 547 637) (9 845 669) Dividends received 103 241 649 72 094 808 Management fees paid (35 608 268) (17 387 630) Interest received/(paid) 91 173 (25 928) Net cash inflow from operating activities 51 176 917 44 835 581 Cash inflow/(outflow) from investing activities 167 088 767 (947 441 737) Sale/(purchase) of listed investments 167 088 767 (947 441 737) Cash (outflow)/inflow from financing (234 855 712) 934 439 519 activities Proceeds on creation of redeemable securities 263 465 187 964 682 934 Redemption of securities (441 121 057) - Distributions paid to investors (57 199 842) (30 243 415) Net (decrease)/increase in cash and cash (16 590 028) 31 833 363 equivalents Cash and cash equivalents at the beginning of year 53 831 820 21 998 457 Cash and cash equivalents at the end of year 37 241 792 53 831 820 2016 2015 Number Number db x-Trackers MSCI USA redeemable securities in issue 153 000 000 159 000 000 In terms of the Trust Deed and CISCA, the Trust is required to pay the net asset value attributable to holders of redeemable securities on redemption of the securities. Vested income beneficiaries include all holders of dbx- trackers MSCI USA redeemable securities. Creations and redemptions There were 9 000 000 (2015: 39 000 000) Index Securities created during the year for a value of R263 465 187 (2015: R964 682 934). There were 15 000 000 (2015 : Nil) redemptions during the year amounting to a value of R441 121 057(2015 : Nil). Distributions The Trust effects semi–annual distributions. All distributions are made out of the income of the Trust. The rebates represent an investor’s partial reduction of the 85.5 basis points management fee charged (2015: 85.5 basis points management fee charged). The rebate is calculated using a sliding scale depending on the size of the investor’s investment. During the year under review the following distributions were effected per db x-trackers MSCI USA Redeemable Security – 4 2016 2015 R R Declared distributions (44 872 088) (45 093 364) 0.14481 Rand per security Declared June 2016 and paid July 2016 (23 893 861) 0.11022 Rand per security (15 210 964) Declared June 2015 and paid July 2015 0.13541 Rand per security Declared December 2016 and paid January 2017 (20 978 227) 0.18794 Rand per security Declared December 2015 and paid January (29 882 400) 2016 Management fees refunded during the year as (3 423 581) (3 580 981) a rebate distribution Total distribution expense for the year (48 295 669) (48 674 345) Total Expense Ratio (TER) The TER represents the total expense to the Trust. The only expense of the Trust is the management fee payable to the Manager which is calculated at 0.855% of assets under management on a daily basis (2015: 0.855% of the assets under management). The Trust had a TER of 85.5 basis points (2015: 85.5 basis). Increased consumer demand for greater transparency in financial services and the recognition thereof by the collective investment industry requires Collective Investment Scheme (CIS) managers to calculate and publish a total expense ratio for each Portfolio under their management. This is a requirement in terms of the Association for Savings and Investments South Africa (ASISA) standard on the calculation and publication of total expense ratios. Statement of compliance The information in the summarised report has been extracted from the audited annual financial statements which have been prepared in accordance with the requirements of the JSE Listing Requirements for abridged reports, and the requirements of CISCA in order to meet the requirements of the Trust Deed approved by the Financial Services Board. The listing requirements require abridged reports to be prepared in accordance with the framework concepts and the measurement and recognition of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements as issued by Financial Reporting Standards Council and to also, as a minimum contain the information required by IAS 34 Interim Financial Reporting. This announcement does not include the information required pursuant to paragraph 16A(j) of IAS 34. The full report is available on the issuer’s website, at the issuer’s registered offices and upon request. These financial statements were authorised for issue by the board of directors of the Manager on 27 March 2017. 4 Accounting policies The accounting policies applied in the preparation of the financial statements from which the summary financial statements were derived are in terms of International Financial Reporting Standards and are consistent with those accounting policies applied in the preparation of the previous annual financial statements. New standards and interpretations not yet adopted The following standards, amendments to standards and interpretations effective for the first time in future accounting periods and which are relevant to the Trust have not been adopted for the reporting periods beginning on or after 1 January 2016: IFRS 9 Financial Instruments – IFRS 9 will be effective for the Trust’s annual reporting period starting 1 January 2018. IFRS 9 will replace the current classification, recognition and measurement requirements of IAS 39 Financial Instruments: Recognition and Measurement. Management expects that the impact of the application of IFRS 9 in the financial statements would be minimal, due to the following reasons: - The Trust’s largest financial instruments are listed equity instruments. These instruments are currently measured at fair value through profit or loss. IFRS 9 requires that all equity instruments be measured at fair value with changes in profit or loss, except for those equity instruments not held for trading and the entity has elected to present the changes in fair value in other comprehensive income. The Trust is not making this alternative accounting election. - Trade and other receivables comprise of short term receivables with established rights and low risk of default. These instruments would continue to be measured at amortised cost in accordance with IFRS 9. It is expected that any associated expected credit losses on these receivables will be minimal. - The financial liabilities comprise mostly of redeemable securities which is designated at fair value through profit or loss. The Trust will continue to designate the liabilities at fair value through profit or loss in accordance with IFRS 9. This is because the liabilities are managed and the performance evaluated on a fair value basis. - Trade and other payables that are financial instruments would continue to be measured at amortised cost. These payables comprise of short term payables. - Fair value changes, dividend income and equalisation on investment appropriations would be recognised in accordance with IFRS 9. The recognition and measurement of these items will remain consistent with the current accounting policy. IFRS 15 Revenue from Contracts with Customers - IFRS 15 will be effective for the Trust’s annual reporting period starting 1 January 2018. IFRS 15 replaces the current effective standards on recognition and measurement of revenues, including IAS 18 Revenue. Management expects that there will be no impact on the application of IFRS 15 due to the following: - IFRS 15 excludes those contractual rights and obligations within the scope of IFRS 9. As noted above, all investment returns will be accounted for in accordance with IFRS 9. 5 Investment income Investment income comprises: - interest income earned on cash and cash equivalents; - cash equalisation component on creations (at the time of creation it represents the income portion attributable to the net asset value at the time that is payable by the creating party) - dividends from listed equities at fair value through profit or loss. Interest income Interest income is recognised in profit or loss, using the effective interest method taking into account the expected timing and amount of cash flows. Dividend income Dividend income is recognised when the right to receive the payment is established. This is usually the ex-dividend date for quoted equities. Audit report This summarised report is itself not reviewed or audited but is extracted from the underlying audited information. The audited annual financial statements for the year ended 31 December 2016 from which the summarised report has been extracted were audited by KPMG Inc, who expressed an unmodified opinion thereon. A copy of the auditor’s report on the audited annual financial statements is available for inspection at the company’s registered office together with the annual financial statements identified in the respective auditor’s reports. A full copy of these financial statements is available on the db x- trackers website www.dbxtrackers.co.za. Directors’ responsibility The directors take full responsibility for the preparation of the abridged report and the financial information has been correctly extracted from the underlying annual financial statements. Sponsor Vunani Corporate Finance Trustee Standard Bank of SA Limited Manager db x-trackers Proprietary Limited 30 March 2017 Date: 30/03/2017 07:30:00 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.