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Abridged audited results for the year ended 31 December 2017 -SYGEU
The Sygnia Itrix Collective Investment Scheme
Sygnia Itrix DJ Euro Stoxx 50 Exchange Traded Fund (The Fund)
JSE code: SYGEU
ISIN: ZAE000249512
A portfolio in the Sygnia Itrix Collective Investment Scheme (Sygnia Itrix),
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 2017
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
RESTATED
2017 2016
R R
REVENUE
Investment income 63 551 324 82 891 689
Net fair value gain on investments at fair value
118 139 421 -
through profit or loss
181 690 745 82 891 689
EXPENSES
Net fair value loss on investments at fair value
- (36 098 450)
through profit or loss
Management and administrative expenses (15 900 180) (16 338 547)
Finance costs (114 565) (46 539)
(16 014 745) (52 483 536)
OPERATING PROFIT BEFORE DISTRIBUTION 165 676 000 30 408 153
Comprising:
Income available for distribution before tax 47 536 579 66 506 603
Capital gain/(loss) retained 118 139 421 (36 098 450)
Distributions (33 139 530) (45 859 801)
Profit/(loss) before tax 132 536 470 (15 451 648)
Withholding tax (15 878 248) (20 679 730)
Profit/(loss) for the year 116 658 222 (36 131 378)
Other comprehensive income not reclassified to
profit or loss
Translation of functional currency to ZAR 20 153 671 (326 679 303)
Total comprehensive income and increase/(decrease)
in net assets attributable to holders of redeemable
securities
136 811 893 (362 810 681)
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
2017 2016
R R
ASSETS
Listed investments held at fair value through profit
2 387 639 116 1 720 206 729
or loss
Trade and other receivables 1 080 486 835 720
Cash and cash equivalents 10 750 184 12 333 134
Total assets 2 399 469 786 1 733 375 583
LIABILITIES
Net assets attributable to holders of redeemable
2 387 977 562 1 722 335 876
securities
Trade and other payables 11 492 224 11 039 707
Total liabilities 2 399 469 786 1 733 375 583
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE SECURITIES
FOR THE YEAR ENDED 31 DECEMBER 2017
R
BALANCE AT 1 JANUARY 2016 2 451 620 038
Loss for the year (36 131 378)
Redemption of securities (366 473 481)
Foreign currency translation adjustments (326 679 303)
BALANCE AT 31 DECEMBER 2016 1 722 335 876
Profit for the year 116 658 222
Redemption of securities (92 839 996)
Creation of redeemable securities 621 669 789
Foreign currency translation adjustments 20 153 671
BALANCE AT 31 DECEMBER 2017 2 387 977 562
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
2017 2016
R R
Cash utilised by operations (14 913 901) (21 401 529)
Dividends received 62 905 129 83 199 004
Management fees paid (14 597 121) (19 026 132)
Interest paid (114 565) (46 539)
Net cash inflow from operating activities 33 279 542 42 724 804
Cash (outflow)/inflow from investing activities (529 139 295) 366 986 223
(Purchase)/sale of listed investments (529 139 295) 366 986 223
Cash inflow/(outflow) from financing activities 494 276 803 (411 167 301)
Creation/(redemption) of securities 528 829 792 (366 473 481)
Distributions paid to investors (34 552 989) (44 693 820)
Net decrease in cash and cash equivalents (1 582 950) (1 456 274)
Cash and cash equivalents at the beginning of year 12 333 134 13 789 408
Cash and cash equivalents at the end of year 10 750 184 12 333 134
SYGNIA ITRIX DJ EURO STOXX 50 REDEEMABLE SECURITIES
2017 2016
Number Number
Total redeemable securities in issue 45 700 000 36 000 000
In terms of the Trust Deed and CISCA, the Fund would be required to pay the net asset
value attributable to investors on redemption of securities.
Vested income beneficiaries include all holders of Sygnia Itrix DJ Euro Stoxx 50
Exchange Traded Fund redeemable securities.
CREATIONS AND REDEMPTIONS
There were 2 000 000 (2016: 8 000 000) redemptions during the year, amounting to R92
839 996 (2016: R366 473 481).
There were 11 700 000 (2016: Nil) creations during the year, amounting to R 621 669
789 (2016: Nil).
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DISTRIBUTIONS
The Fund effects semi–annual distributions. All distributions are made out of the
income of the Fund.
The rebates represent an investor’s partial reduction of the 85.5 basis points
management fee charged (2016: 85.5 basis points management fee charged).
The rebate is calculated using a sliding scale that is dependent on the size of the
investor’s investment.
During the year under review the following distributions were effected by Sygnia
Itrix DJ Euro Stoxx 50 Redeemable Security:
2017 2016
R R
Declared distributions (31 588 879) (44 789 118)
0.82250 rand per security
Declared June 2017 and paid July 2017 (29 609 872)
0.94083 rand per security
Declared June 2016 and paid July 2016 (41 396 652)
0.04362 rand per security
Declared December 2017 and paid January 2018 (1 979 007)
0.09368 rand per security
Declared December 2016 and paid January 2017 (3 392 466)
Management fees refunded during the year as a rebate
(1 550 651) (1 070 683)
distribution
Total distribution expense for the year (33 139 530) (45 859 801)
TOTAL EXPENSE RATIO (TER)
The TER represents the total expense to the Fund. The only expense of the Fund is
the management fee payable to the Manager, which is calculated at 0.855% of the assets
under management on a daily basis (2016: 0.855% of assets under management). The Fund
had a TER of 85.5 basis points (2016: 85.5 basis points).
The TER disclosed is calculated based on the highest management fee scale applicable.
The actual management fee scale is a sliding scale with significant fee reductions
applied for larger investment amounts.
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 fund under their management.
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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 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 2018.
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 except for
the correction of the foreign currency to presentation currency translation which
has been reflected in other comprehensive income. The correction hereof had no
impact on the amounts reflected in the Statement of Financial Position, Statement of
Cash flows or the Profit/(loss) Before Tax presented in 2016.
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 Fund have
not been early adopted.
IFRS 9 Financial Instruments - IFRS 9 will be effective for the Fund’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 will be minimal for the following
reasons:
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• The Fund’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 for
which the entity has elected to present the changes in fair value in other
comprehensive income. The Fund is not making use of this alternative accounting
option.
• Trade and other receivables are comprised of short-term receivables with established
rights and low risk of default. These instruments will continue to be measured at
amortised cost in accordance with IFRS 9. It is expected that any associated credit
losses on these receivables will be minimal.
• The financial liabilities are comprised mostly of redeemable securities, which are
designated at fair value through profit or loss. The Fund 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 will continue to be measured
at amortised cost. These payables are comprised of short-term payables.
• Fair value changes, dividend income and equalisation on investment appropriations
will 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
Fund’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.
IFRS 16 Leases – IFRS 16 will be effective for the Fund’s annual reporting period
starting 1 January 2019. IFRS 16 provides a single-lessee accounting model, specifying
how leases will be recognised, measured and disclosed. Management expects that there
will be no impact on the application of IFRS 16 in the current reporting period.
IFRS 17 Insurance Contracts – IFRS 17 will be effective for the Fund's annual reporting
period starting 1 January 2021. IFRS 17 provides a single accounting model that measures
insurance contracts using current estimates. Management expects that there will be no
impact on the application of IFRS 17 in the current reporting period.
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); and
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• Dividends from listed equities held 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 2017 from which the summarised report has been extracted were audited
by Deloitte and Touche, 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 Sygnia website:
https://www.sygnia.co.za/etfs/documents.
DIRECTORS’ RESPONSIBILITY
The directors take full responsibility for the preparation of the abridged report
and confirm that the financial information was correctly extracted from the
underlying annual financial statements.
Sponsor
Vunani Corporate Finance
Trustee
Standard Bank of SA Limited
Manager
Sygnia Itrix (RF) Proprietary Limited
28 March 2018
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