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Abridged Results for the Year Ended 31 December 2017 - STXRES
SATRIX RESI
JSE code: STXRES
ISIN: ZAE000078622
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 8 922 692 4 418 514
Interest income 52 448 57 568
Total income 8 975 140 4 476 082
Expenses
Management fee (1 200 593) (847 627)
Transaction costs (62 892) (191 868)
Trustee and custodian fees (65 189) (60 088)
Total operating expenses (1 328 674) (1 099 583)
Income attributable to investors before
distribution 7 646 466 3 376 499
Income distributions (8 060 601) (2 990 699)
Income attributable to investors after
distributions (414 135) (385 800)
Realised gains / (losses) on financial
instruments designated at fair value through
profit or loss 537 316 (12 139 878)
Unrealised gains on financial instruments
designated at fair value through profit or
loss 33 772 051 66 320 034
Total fair value adjustments 34 309 367 (54 180 156)
Increase in net assets attributable to
investors after distributions 33 895 232 54 565 956
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 329 519 579 245 587 587
Interest receivable 1 227 6 904
Cash and cash equivalents 178 670 1 230 319
Total assets 329 699 476 246 824 810
LIABILITIES
Distributions payable to investors - 688 894
Other payables 113 522 67 819
Total liabilities (excluding net assets
attributable to investors) 113 522 756 713
Net assets attributable to investors 329 585 954 246 068 097
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS
for the year ended 31 December 2017
Capital Income Net assets
attributable attributable to attributable
to investors investors to investors
R R R
Balance at 1 January 2016 191 938 447 94 710 192 033 157
Creations of Satrix RESI
Securities 30 845 313 - 30 845 313
Redemption of Satrix RESI
Securities (31 376 329) - (31 376 329)
Increase in net assets
attributable to investors
after distributions 54 180 156 385 800 545 565 956
Balance at 31 December 2016 245 587 587 480 510 246 068 097
Creations of Satrix RESI
Securities 158 523 843 - 158 523 843
Redemption of Satrix RESI
Securities (108 901 218) - (108 901 218)
Increase in net assets
attributable to investors
after distributions 34 309 367 (414 135) 33 895 232
Balance at 31 December 2017 329 519 579 66 375 329 585 954
STATEMENT OF CASH FLOWS
for the year ended 31 December 2017
2017 2016
R R
Net cash generated from operating activities 7 697 846 3 404 428
Cash utilised by operations (1 282 971) (1 066 893)
Interest received 58 125 52 807
Dividend received 8 922 692 4 418 514
Cash (outflow)/ inflow from investing
activities (49 622 625) 531 016
Purchase of underlying constituents (197 891 578) (70 695 454)
Sale of underlying constituents 148 268 953 71 226 470
Cash inflow/(outflow) from financing
activities 40 873 130 (2 832 821)
Creation of Satrix RESI Securities 158 523 843 30 845 313
Redemption of Satrix RESI Securities (108 901 218) (31 376 329)
Cash distributed to security holders (8 749 495) (2 301 805)
Net (decrease) / increase in cash and cash
equivalents (1 051 649) 1 102 623
Cash and cash equivalents at the beginning
of the year 1 230 319 127 696
Cash and cash equivalents at the end of the
year 178 670 1 230 319
SATRIX RESI SECURITIES
During the year, 4 400 000 (2016: 1 000 000) Satrix RESI securities were
created at a value of R158 523 843 (2016: R30 845 313) and 3 000 000 (2016:
1000 000) Satrix RESI securities were redeemed at a value of R108 901 218
(2016: R31 376 329). All creations and liquidations were in specie.
Distributions
The Portfolio effects quarterly distributions. All distributions are made
out of income of the Satrix RESI 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 RESI Security.
2017 2016
R R
31.92 cents per security
Declared 31 March 2017 and
paid 7 April 2017 2 390 162
3.77 cents per security
Declared 1 April 2016 and 282 297
paid 14 April 2016
4.33 cents per security
Declared 30 June 2017 and
paid 6 July 2017 324 230
13.95 cents per security
Declared 24 June 2016 and
paid 22 July 2016 1 044 573
59.05 cents per security
Declared 29 September 2017 and
paid 4 October 2017 6 488 399
13.02 cents per security
Declared 30 September 2016 and
paid 12 October 2016 974 935
0.00 cents per security
Declared 12 January 2017 -
9.20 cents per security
Declared 30 December 2016 and
paid 12 January 2017 688 894
Accrued income portion of NAV received on
creation of securities (1 142 190) -
Total distributions 8 060 601 2 990 699
Operating Segments
The Satrix RESI 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 329 519 579 – –
Net assets attributable to
investors – (329 585 954) –
Total 329 519 579 (329 585 954) –
Level 1 Level 2 Level 3
31 December 2016 R R R
Financial instruments
designated at fair value
through profit or loss:
Listed equities 245 587 587 – –
Net assets attributable to
investors – (246 068 097) –
Total 245 587 587 (246 068 097) –
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 – 1 227 –
Cash and cash equivalents – 178 670 –
Total – 179 897 –
31 December 2017 R R R
Liabilities
Distributions payable -
Other payables – – 113 522
Total – – 113 522
Level 1 Level 2 Level 3
31 December 2016 R R R
Assets
Interest receivable – 6 904 –
Cash and cash equivalents – 1 230 319 –
Total – 1 237 223 –
31 December 2016 R R R
Liabilities
Distributions payable 688 894
Other payables – – 67 819
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.
2017 2016
R R
Management fee paid
Satrix Managers (RF) Proprietary Limited 1 087 071 814 937
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 113 522 67 819
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 RESI Portfolio had a TER of 41.85 (2016: 38.66 (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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