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Abridged Audited Results For The Year Ended 31 December 2016 - STXSWX
SATRIX COLLECTIVE INVESTMENT SCHEME
SATRIX SWIX TOP 40
JSE code: STXSWX
ISIN: ZAE000078580
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 10 663 102 11 523 494
Fee income: Securities lending - 86 868
Interest income 124 406 104 351
REIT income 1 020 440 436 709
Total income 11 807 948 12 151 422
Expenses
Management fee (1 686 745) (1 677 077)
Transaction costs (279 731) (172 705)
Trustee and custodian fees (92 182) (104 214)
Total operating expenses (2 058 658) (1 953 996)
Income attributable to investors before
distribution 9 749 290 10 197 426
Income distributions (9 690 428) (10 029 251)
Income attributable to investors after
distributions 58 862 168 175
Realised gains on financial instruments
designated at fair value through profit or
loss 20 321 992 7 756 845
Unrealised (losses)/gains on financial
instruments designated at fair value through
profit or loss (41 156 838) 3 481 499
Total fair value adjustments (20 834 846) 11 238 344
Increase in net assets attributable to
investors after distributions (20 775 984) 11 406 519
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 493 552 805 387 477 188
Interest receivable 12 589 10 946
Cash and cash equivalents 2 598 774 2 486 214
Total assets 496 164 168 389 974 348
LIABILITIES
Distributions payable to investors 2 272 119 2 229 142
Other payables 146 167 133 803
Total liabilities (excluding net assets
attributable to investors) 2 418 286 2 362 945
Net assets attributable to investors 493 745 882 387 611 403
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS
for the year ended 31 December 2016
Capital Income Net assets
attributable attributable attributable
to investors to investors to investors
R R R
Balance at 1 January 2015 376 238 844 (33 960) 376 204 884
Increase in net assets
attributable to investors
after distributions 11 238 344 168 175 11 406 519
Balance at 31 December 2015 387 477 188 134 215 387 611 403
Creation of Satrix SWIX TOP
40 securities 126 910 463 - 126 910 463
Increase in net assets
attributable to investors
after distributions (20 834 846) 58 862 (20 775 984)
Balance at 31 December 2016 493 552 805 193 077 493 745 882
STATEMENT OF CASH FLOWS
for the year ended 31 December 2016
2016 2015
R R
Net cash generated from operating activities 9 760 011 10 206 647
Cash utilised by operations (2 046 294) (1 948 617)
Fee income: Securities lending - 93 328
Interest received 122 763 101 733
REIT received 1 020 440 436 709
Dividend received 10 663 102 11 523 494
Cash outflow from investing activities (126 910 463) -
Purchase of underlying constituents (205 035 550) (55 646 691)
Sale of underlying constituents 78 125 087 55 646 691
Cash inflow/(outflow) from financing
activities 117 263 012 (9 738 821)
Creation of Satrix SWIX TOP 40 Securities 126 910 463 -
Cash distributed to security holders (9 647 451) (9 738 821)
Net movement in cash and cash equivalents 112 560 467 826
Cash and cash equivalents at the beginning
of the year 2 486 214 2 018 388
Cash and cash equivalents at the end of the
year 2 598 774 2 486 214
SATRIX SWIX TOP 40 SECURITIES
During the year, 12 000 000 (2015: nil) Satrix Swix Top 40 securities were
created at a value of R126 910 463 (2015: R nil) and nil (2015: nil) Satrix
Swix Top 40 securities were redeemed at a value of R nil (2015: nil). All
creations and liquidations were in specie.
Distributions
The Portfolio effects quarterly distributions. All distributions were made
out of income of the Satrix Swix Top 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 SWIX Top 40 Security.
2016 2015
R R
2.08 cents per security
Declared 1 April 2016 and 784 537
paid 14 April 2016
2.96 cents per security
Declared 27 March 2015 and
paid 29 April 2015 1 116 456
10.42 cents per security
Declared 24 June 2016 and paid
22 July 2016 3 930 229
9.75 cents per security
Declared 26 June 2015 and
paid 23 July 2015 3 677 518
7.47 cents per security
Declared 30 September 2016 and
Paid 12 October 2016 3 041 644
7.97 cents per security
Declared 25 September 2015 and
Paid 22 October 2015 3 006 135
4.57 cents per security
Declared 30 December 2016 and
paid 12 January 2017 2 272 118
5.91 cents per security
Declared 31 December 2015 and
paid 26 January 2016 2 229 142
Accrued income portion of NAV paid
redemption/(creation) of securities (338 100) -
Total distributions 9 690 428 10 029 251
Operating Segments
The Satrix SWIX TOP 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 493 552 805 – –
Net assets attributable to
investors – (493 745 882) –
Total 493 552 805 (493 745 882) –
Level 1 Level 2 Level 3
31 December 2015 R R R
Financial instruments
designated at fair value
through profit or loss:
Listed equities 387 477 188 – –
Net assets attributable to
investors – (387 611 403) –
Total 387 477 188 (387 611 403) –
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 – 12 589 –
Cash and cash equivalents – 2 598 774 –
Total – 2 611 363 –
31 December 2016 R R R
Liabilities
Distributions payable to
investors – – 2 272 119
Other payables – – 146 167
Total – – 2 418 286
Level 1 Level 2 Level 3
31 December 2015 R R R
Assets
Interest receivable – 10 946 –
Cash and cash equivalents – 2 486 214 –
Total – 2 497 160 –
31 December 2015 R R R
Liabilities
Distributions payable to
investors – – 2 229 142
Other payables – – 133 803
Total – – 2 362 945
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 1 674 381 1 701 461
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 146 167 133 803
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 SWIX TOP 40 Portfolio had a TER of 44.27 (2015: 45.36) 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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