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Abridged Audited Results For The Year Ended 31 December 2016 - STX40
SATRIX COLLECTIVE INVESTMENT SCHEME
SATRIX SATRIX 40
JSE code: STX40
ISIN: ZAE000027108
A portfolio in the Satrix Collective Investment Scheme (“Satrix”), registered
as such in terms of the Collective Investment Schemes Control Act, 45 of 2002
(the “Act”)
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2016
2016 2015
R R
Income
Dividend income 166 725 809 243 169 231
Fee income: Securities lending - 2 305 970
REIT income 12 059 526 6 249 314
Other income - 864 734
Interest income 1 869 009 1 920 001
Total income 180 654 344 254 509 250
Expenses
Management fee (25 249 665) (34 017 717)
Trustee and custodian fees (271 135) (310 955)
Transaction costs (5 496 525) (2 430 388)
Total operating expenses (31 017 325) (36 759 060)
Income attributable to investors before
distribution 149 637 019 217 750 190
Income distributions (146 701 640) (212 860 123)
Income attributable to investors after
distributions 2 935 379 4 890 067
Realised gains on financial instruments
designated at fair value through profit or
loss 1 242 960 163 830 498 267
Unrealised losses on financial instruments
designated at fair value through profit or
loss (1 557 523 753) (551 952 416)
Total fair value adjustments (314 563 590) 278 545 851
(Decrease) / increase in net assets
attributable to investors after
distributions (311 628 211) 283 435 918
STATEMENT OF FINANCIAL POSITION
at 31 December 2016
2016 2015
R R
ASSETS
Listed equities designated as held at fair
value through profit or loss 6 519 100 638 6 983 761 566
Interest receivable 142 319 202 621
Other receivables - 379 286
Cash and cash equivalents 29 465 672 44 203 976
Total assets 6 548 708 629 7 028 547 449
LIABILITIES
Distributions payable to investors 21 932 267 39 480 177
Other payables 1 897 634 2 462 995
Total liabilities (excluding net assets
attributable to investors) 23 829 901 41 943 172
Net assets attributable to investors 6 524 878 728 6 986 604 277
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS
for the year ended 31 December 2016
Capital Income Net assets
attributable to attributable attributable
investors to investors to investors
R R R
Balance at 1 January 2015 7 804 308 063 (2 047 356) 7 802 260 707
Creation of Satrix 40
securities 374 055 561 - 374 055 561
Redemption of Satrix 40
Securities (1 473 147 909) - (1 473 147 909)
Increase/(decrease) in net
assets attributable to
investors after
distributions 278 545 851 4 890 067 283 435 918
Balance at 31 December 2015 6 983 761 566 2 842 711 6 986 604 277
Creations of Satrix 40
Securities 1 061 900 278 - 1 061 900 278
Redemption of Satrix 40
Securities (1 211 997 616) - (1 211 997 616)
(Decrease) / increase in
net assets attributable to
investors after
distributions (314 563 590) 2 935 379 (311 628 211)
Balance at 31 December 2016 6 519 100 638 5 778 090 6 524 878 728
STATEMENT OF CASH FLOWS
for the year ended 31 December 2016
2016 2015
R R
Net cash generated from operating
activities 149 511 246 216 244 549
Cash utilised by operations (31 203 400) (37 480 908)
Fee income: Securities lending - 2 431 993
Interest received 1 929 311 1 874 919
REIT received 12 059 526 6 248 314
Dividend received 166 725 809 243 169 231
Cash inflow from investing activities 150 097 338 1 099 092 348
Purchase of underlying constituents (2 630 641 756) (1 272 825 091)
Sale of underlying constituents 2 780 739 094 2 371 917 439
Cash outflow from financing activities (314 346 888) (1 310 118 345)
Creation of Satrix 40 Securities 1 061 900 278 374 055 561
Redemption of Satrix 40 Securities (1 211 997 616) (1 473 147 909)
Cash distributed to security holders (164 249 550) (211 025 997)
Net movement in cash and cash equivalents (14 738 304) 5 218 552
Cash and cash equivalents at the beginning
of the year 44 203 976 38 985 424
Cash and cash equivalents at the end of
the year 29 465 672 44 203 976
SATRIX 40 SECURITIES
During the year, 23 000 000 (2015: 8 000 00) Satrix 40 securities were
created at a value of R1 061 900 278 (2015: R374 055 561) and 27 000 000
(2015: 33 000 000) Satrix 40 securities were redeemed at a value of
R1 211 997 616 (2015: R1 473 147 909). All creations and liquidations were
in specie.
Distributions
The Portfolio effects quarterly distributions. All distributions were made
out of income of the Satrix 40 Portfolio. The record dates were 1 April
2016, 24 June 2016, 30 September 2016 and 30 December 2016 respectively.
During the year under review the following distributions were effected per
Satrix 40 Security.
2016 2015
R R
9.20 cents per security
Declared 1 April 2016 and 14 029 263
paid 14 April 2016
21.48 cents per security
Declared 27 March 2015 and
paid 29 April 2015 37 695 680
36.08 cents per security
Declared 24 June 2016 and paid
22 July 2016 53 936 710
32.00 cents per security
Declared 26 June 2015 and paid
23 July 2015 54 877 437
39.33 cents per security
Declared 30 September 2016 and
Paid 12 October 2016 56 435 400
45.21 cents per security
Declared 25 September 2015 and
Paid 22 October 2015 74 818 929
14.77 cents per security
Declared 30 December 2016 and
paid 12 January 2017 21 932 267
25.89 cents per security
Declared 31 December 2015 and
paid 26 January 2016 39 480 177
Accrued income portion of NAV paid
redemption/(creation) of securities 368 000 5 987 900
Total distributions 146 701 640 212 860 123
Operating Segments
The Satrix 40 Portfolio offers only one product, being the specific exchange
traded fund, tracking the specific identified index.
Information regarding the results of the reportable segment is disclosed in
Financials statements as currently set out, thus no further IFRS 8
disclosure is required.
Fair value estimation
The fair value of financial assets and liabilities traded in active markets
(such as publicly traded derivatives and trading securities) are based on
quoted market prices at the close of trading at the year-end date.
The following tables analyse, within the fair value hierarchy, the
Portfolio's financial assets and liabilities (by class) measured at fair
value at 31 December:
Level 1 Level 2 Level 3
31 December 2016 R R R
Financial instruments
designated at fair value
through profit or loss:
Listed equities 6 519 100 638 – –
Net assets attributable to
investors - (6 524 878 728) –
Total 6 519 100 638 (6 524 878 728) –
31 December 2015
Financial instruments
designated at fair value
through profit or loss:
Listed equities 6 983 761 566 – –
Net assets attributable to
investors - (6 986 604 277) –
Total 6 983 761 566 (6 986 604 277) –
The following table analyses, within the fair value hierarchy, the
Portfolio’s assets and liabilities (by class) not measured at fair value at
31 December but for which fair value is disclosed:
Level 1 Level 2 Level 3
31 December 2016 R R R
Assets
Interest receivable – 142 319 –
Cash and cash equivalents – 29 465 672 –
Total – 29 607 991 -
31 December 2016 R R R
Liabilities
Distributions payable to
investors – – 21 932 267
Other payables – – 1 897 634
Total – – 23 829 901
Level 1 Level 2 Level 3
31 December 2015 R R R
Assets
Interest receivable – 202 621 –
Other receivables – – 379 286
Cash and cash equivalents – 44 203 976 –
Total – 44 406 597 379 286
31 December 2015 R R R
Liabilities
Distributions payable to
investors – – 39 480 177
Other payables – – 2 462 995
Total – – 41 943 172
Related parties
Related parties include Satrix Managers (RF) (Proprietary) Limited in its
capacity as the management company of the Portfolio. The following related
party balances and transactions occurred during the year.
2016 2015
R R
Management fee paid
Satrix Managers (RF) Proprietary Limited 25 815 026 35 068 999
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 1 897 634 2 462 995
All related party transactions are conducted at arm’s length on normal
commercial terms and conditions. Outstanding balances will be settled in the
ordinary course of business.
Total Expense Ratio ('TER')
The TER is a standard measure used by the Collective Investment Scheme
(‘CIS’) industry to illustrate costs of portfolios on a comparable basis.
The TER includes the management fee, audit fees, bank charges, custodian
fees, costs related to securities lending and taxes.
The Satrix 40 Portfolio had a TER of 42.61 (2015: 45.08) basis points for
the period 1 January 2014 to 31 December 2016. The ratio is calculated based
on the Association for Savings and Investments South Africa (‘ASISA’)
standard and does not include the cost of acquiring assets.
Increased consumer demand for greater transparency in financial services and
the recognition thereof by the Collective Investment industry requires
managers to calculate and publish a total expense ratio for each Portfolio
under their management. This is a requirement in terms of the ASISA standard
on the calculation and publication of total expense ratios.
Statement of compliance
The financial statements are prepared in accordance with International
Financial Reporting Standards (‘IFRS’) issued by the International
Accounting Standards Board (‘IASB’) and SAICA Financial Reporting Guides as
issued by the Accounting Practices, the Financial Reporting Pronouncements
as issued by the Financial Reporting Standards Council and in accordance
with the requirements of the Collective Investment Schemes Control Act of
South Africa(‘CISCA’), in order to meet the requirements of the Trust Deed
approved by the Financial Services Board.
The abridged financial results have been prepared in accordance with the
framework concepts and the recognition and measurement requirements of
International Financial Reporting Standards (IFRS) and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Board. The
disclosures comply with International Accounting Standards (IAS) 34.
Functional and presentation currency
These financial statements are presented in South African Rand, which is the
Portfolio’s functional currency.
Accounting policies
The financial statements incorporate the principal accounting policies that
are consistent with those adopted in the previous financial year. The new
pronouncements applicable for the financial year ending 31 December 2016 for
the first time, was assessed and did not have a significant impact to the
financial position or performance of the Portfolio.
Forthcoming requirements
New standards, amendments to standards and interpretations not yet adopted
A number of standards, amendments to standards and interpretations are not
effective for the year ended 31 December 2016, and have not been applied in
preparing these financial statements. All standards and interpretations
issued but not effective for the year ended 31 December 2016, and have been
considered. None of these are expected to have a significant effect on the
recognition and measurement of the amounts recognised in the financial
statements of the Portfolio.
Standard/Interpretation Effective date
IFRS 15 Revenue from contracts with Annual periods beginning
customers on or after 1 January 2018
IFRS 16 Leases Annual periods beginning
on or after 1 January 2019
IAS 7 amendment Disclosure initiative Annual periods beginning
on or after 1 January 2017
IAS 12 amendment Recognition of Deferred Tax Annual periods beginning
on or after 1 January 2017
Assets for Unrealised
Losses
IFRS 2 amendment Share based payments’, on Annual periods beginning
on or after 1 January 2018
clarifying how to account
for certain types of share-
based payment transactions
IFRS 4 amendment ‘Insurance contracts’ Annual periods beginning
regarding the on or after 1 January 2018
implementation of IFRS 9,
’Financial instruments’
IAS 40 amendment Transfer of investment Annual periods beginning
property on or after 1 January 2018
IAS 10 and IAS 28 Sale or contribution of Deferred until IASB has
amendment Asset between an Investor finalised research project
and its Associate or Joint
Venture
The following standards may have a significant effect on the recognition and
measurement of the amounts recognised in the financial statements of the
Portfolio.
IFRS 9 Financial Instruments Annual periods beginning
on or after 1 January 2018
Impact assessment
The IASB issued the final version of IFRS 9 Financial Instruments that
replaces IAS 39 Financial Instruments: Recognition and Measurement and all
previous versions of IFRS 9. IFRS 9 brings together all three aspects of the
accounting for the financial instruments project: classification and
measurement; impairment; and hedge accounting.
The Portfolio plans to adopt the new standard on the required effective
date. The Portfolio has performed a high-level impact assessment of all
three aspects of IFRS 9. This preliminary assessment is based on currently
available information and may be subject to changes arising from further
detailed analyses or additional reasonable and supportable information being
made available in the future. Overall, no significant impact on its balance
sheet and equity are expected.
Classification and measurement
The Portfolio does not expect a significant impact on its balance sheet or
equity on applying the classification measurement requirements for IFRS 9.
It expects to continue measuring at fair value all financial assets
currently held at fair value.
Trade and other receivables are held to collect contractual cash flows and
are expected to give rise to cash flows representing solely payments of
principal and interest. Thus, the Portfolio expects that these will continue
to be measured at amortised cost under IFRS 9. However, the Portfolio will
analyse the contractual cash flow characteristics of those instruments in
more detail before concluding whether all those instruments meet the
criteria for amortised cost measurement under IFRS 9.
Impairment
IFRS 9 requires the portfolio to record expected credit losses on all of its
debt securities, loans and trade receivables, either on a 12-month or
lifetime basis. The Portfolio expects to apply the simplified approach and
record lifetime expected losses on all trade receivables. The Portfolio does
not expect a significant impact on its equity due to the short term nature
of the receivables but it will need to perform a more detailed analysis
which considers all reasonable and supportable information, including
forward-looking elements to determine the extent of the impact.
Hedge accounting
As IFRS 9 does not change the general principles of how an entity accounts
for effective hedges, the Portfolio does not expect a significant impact as
a result of applying IFRS 9. The Portfolio will assess possible changes
related to the accounting for the time value of options, forward points or
the currency basis spread in more detail in the future.
Preparer of Abridged annual financial statements for the year ended 31
December 2016
These Abridged annual financial statements have been prepared by T du
Plessis CA (SA), the Financial Manager. The financial information has been
correctly extracted from the underlying annual financial statements. The
directors take full responsibility for the preparation of the abridged
annual financial statements.
The abridged annual financial statements are extracted from audited
information, but are not itself audited. The annual financial statements
have been audited by Ernst & Young Inc. The audited annual financial
statements and the audit report are available for inspection at the
registered office of Satrix Managers (RF) (Pty) Limited, 4th Floor, Building
2, 11 Alice Lane, Sandton.
A full copy of these financial statements is available on the Satrix website
www.satrix.co.za.
31 March 2017
Sponsor
Vunani Corporate Finance
Trustee
Standard Chartered Bank
Manager
Satrix Managers (RF) Proprietary Limited
Date: 31/03/2017 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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