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Abridged Results for the Year Ended 31 December 2017 - STX40
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 RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2017
2017 2016
R R
Income
Dividend income 187 073 756 166 725 809
REIT income 16 147 988 12 059 526
Interest income 1 508 359 1 869 009
Total income 204 730 103 180 654 344
Expenses
Management fee (21 922 430) (25 249 665)
Trustee and custodian fees ( 236 679) (271 135)
Transaction costs (2 185 194) (5 496 525)
Total operating expenses (24 344 303) (31 017 325)
Income attributable to investors before
distribution 180 385 799 149 637 019
Income distributions (177 664 149) (146 701 640)
Income attributable to investors after
distributions 2 721 650 2 935 379
Realised gains on financial instruments
designated at fair value through profit or
loss 183 062 780 1 242 960 163
Unrealised gains/(losses) on financial
instruments designated at fair value through
profit or loss 1 103 572 256 (1 557 523 753)
Total fair value adjustments 1 286 635 036 (314 563 590)
Increase / (decrease) in net assets
attributable to investors after
distributions 1 289 356 686 (311 628 211)
STATEMENT OF FINANCIAL POSITION
at 31 December 2017
2017 2016
R R
ASSETS
Listed equities designated as held at fair
value through profit or loss 7 900 531 641 6 519 100 638
Interest receivable 212 418 142 319
Other receivables 2 381 613 -
Cash and cash equivalents 44 540 450 29 465 672
Total assets 7 947 666 122 6 548 708 629
LIABILITIES
Distributions payable to investors 38 235 135 21 932 267
Other payables 399 606 1 897 634
Total liabilities (excluding net assets
attributable to investors) 38 634 741 23 829 901
Net assets attributable to investors 7 909 031 381 6 524 878 728
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS
for the year ended 31 December 2017
Capital Income Net assets
attributable to attributable attributable
investors to investors to investors
R R R
Balance at 1 January 2016 6 983 761 566 2 842 711 6 986 604 277
Creation 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 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
Creations of Satrix 40
Securities 635 219 407 - 635 219 407
Redemption of Satrix 40
Securities ( 540 423 440) - ( 540 423 440)
Increase in net assets
attributable to investors
after distributions 1 286 635 036 2 721 650 1 289 356 686
Balance at 31 December 2017 7 900 531 641 8 499 740 7 909 031 381
STATEMENT OF CASH FLOWS
for the year ended 31 December 2017
2017 2016
R R
Net cash generated from operating
activities 176 436 059 149 511 246
Cash utilised by operations (28 223 945) (31 203 400)
Interest received 1 438 260 1 929 311
REIT received 16 147 988 12 059 526
Dividend received 187 073 756 166 725 809
Cash (outflow)/inflow from investing
activities ( 94 795 967) 150 097 338
Purchase of underlying constituents (1 141 898 867) (2 630 641 756)
Sale of underlying constituents 1 047 102 900 2 780 739 094
Cash outflow from financing activities ( 66 565 314) (314 346 888)
Creation of Satrix 40 Securities 635 219 407 1 061 900 278
Redemption of Satrix 40 Securities (540 423 440) (1 211 997 616)
Cash distributed to security holders (161 361 281) (164 249 550)
Net increase/(decrease) in cash and cash
equivalents 15 074 778 (14 738 304)
Cash and cash equivalents at the beginning
of the year 29 465 672 44 203 976
Cash and cash equivalents at the end of
the year 44 540 450 29 465 672
SATRIX 40 SECURITIES
During the year, 13 000 000 (2016: 23 000 00) Satrix 40 securities were
created at a value of R635 219 407(2016: R1 061 900 278) and 11 100 000
(2016: 27 000 000) Satrix 40 securities were redeemed at a value of R540 423
440(2016: R1 211 997 616). All creations and liquidations were in specie.
Distributions
The Portfolio effects quarterly distributions. All distributions are made
out of income of the Satrix 40 Portfolio. The record dates are 31 March
2017, 30 June 2017, 29 September 2017 and 12 January 2018.
During the year under review the following distributions were effected per
Satrix 40 Security.
2017 2016
R R
29.56 cents per security
Declared 31 March 2017 and
paid 7 April 2017 44 189 832
9.20 cents per security
Declared 1 April 2016 and
paid 14 April 2016 14 029 263
21.82 cents per security
Declared 30 June 2017 and
paid 6 July 2017 32 182 753
36.08 cents per security
Declared 24 June 2016 and paid
22 July 2016 53 936 710
41.08 cents per security
Declared 29 September 2017 and
paid 4 October 2017 62 232 909
39.33 cents per security
Declared 30 September 2016 and
Paid 12 October 2016 56 435 400
25.09 cents per security
Declared 12 January 2018 and
paid 17 January 2018 38 235 135
14.77 cents per security
Declared 30 December 2016 and
paid 12 January 2017 21 932 267
Accrued income portion of NAV
paid/(received)redemption/(creation) of
securities 823 520 368 000
Total distributions 177 664 149 146 701 640
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 2017 R R R
Financial instruments
designated at fair value
through profit or loss:
Listed equities 7 900 531 641 – –
Net assets attributable to
investors - (7 909 031 381) –
Total 7 900 531 641 (7 909 031 381) –
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) –
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 2017 R R R
Assets
Interest receivable – 212 418 –
Cash and cash equivalents – 44 540 450 –
Total – 44 752 868 -
31 December 2017 R R R
Liabilities
Distributions payable to
investors – – 38 235 135
Other payables – – 399 606
Total – – 38 634 741
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
Related parties
Related parties include Satrix Managers (RF) (Proprietary) Limited in its
capacity as the management company of the Portfolio.
Sanlam Limited is the ultimate holding company of Satrix Managers (RF)
Proprietary Limited.
The following related party balances and transactions occurred during the
year.
2017 2016
R R
Management fee paid
Satrix Managers (RF) Proprietary Limited 23 420 458 25 815 026
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 399 606 1 897 634
Participatory Interest Held
Sanlam Limited 395 451 569 349 081 012
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, taxes and underlying fund costs.
The Satrix 40 Portfolio had a TER of 31.25 (2016: 38.18 (restated)) basis
points (annualised) for the period 1 January 2017 to 31 December 2017.
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.
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 2017 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 2017, and have not been applied in
preparing these financial statements. All standards and interpretations
issued but not effective for the year ended 31 December 2017, 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
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.
Hedge accounting
The entity does not apply hedge accounting.
New standards and interpretation
The following new standards, interpretations and amendments were adopted to
existing standards. There has been no significant effect on the financial
statements of the Portfolio.
IAS 7 Disclosure Initiative - Annual periods beginning
Amendments to IAS 7 on or after 1 January 2017
Preparer of Abridged annual financial statements for the year ended 31
December 2017
These Abridged annual financial statements have been prepared by I Ismail
(Professional Accountant) (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.
29 March 2018
Sponsor
Vunani Corporate Finance
Trustee
Standard Chartered Bank
Manager
Satrix Managers (RF) Proprietary Limited
Date: 29/03/2018 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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