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SATRIX COLLECTIVE INVESTMENT SCHEME - Abridged Audited Results For The Year Ended 31 December 2016 - STXSWX

Release Date: 31/03/2017 08:30
Code(s): STXSWX     PDF:  
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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

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