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Abridged Results for the Year Ended 31 December 2017 - STXRAF
SATRIX RAFI 40
JSE code: STXRAF
ISIN: ZAE000126033
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 31 550 141 27 820 467
REIT income 1,504,694 1 137 660
Interest income 199 476 207 293
Total income 33 254 311 29 165 420
Expenses
Management fee (4 446 591) (4 397 090)
Transaction costs (250 664) (1 206 232)
Trustee and custodian fees (105 524) (96 714)
Total operating expenses (4 802 779) (5 700 036)
Income attributable to investors before
distribution 28 451 532 23 465 384
Income distributions (27 765 888) (23 172 149)
Income attributable to investors after
distributions 685 644 293 235
Realised gains on financial instruments
designated at fair value through profit or
loss 16 323 408 74 620 168
Unrealised gains on financial instruments
designated at fair value through profit or
loss 101 339 940 50 980 207
Total fair value adjustments 117 663 348 125 600 375
Increase in net assets attributable to
investors after distributions 118 348 992 125 893 610
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 960 582 572 892 779 778
Interest receivable 12 935 12 139
Other receivables 179 022
Cash and cash equivalents 2 812 739 2 276 800
Total assets 963 587 268 895 068 717
LIABILITIES
Other payables 372 185 342 072
Total liabilities (excluding net assets
attributable to investors) 372 185 342 072
Net assets attributable to investors 963 215 083 894 726 645
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 857 523 064 1 653 632 859 176 696
Redemption of Satrix RAFI 40
Securities (110 106 885) - (110 106 885)
Increase in net assets
attributable to investors
after distributions 125 600 375 23 465 384 149 065 759
Dividends reinvested 19 763 224 - 19 763 224
Distributions to investors - (23 172 149) (23 172 149)
Balance at 31 December 2016 892 779 778 1 946 867 894 726 645
Creation of Satrix RAFI 40
Securities 21 990 858 - 21 990 858
Redemption of Satrix RAFI 40
Securities (94 094 439) - (94 094 439)
Increase in net assets
attributable to investors
after distributions 117 663 348 28 451 532 146 114 880
Dividends reinvested 22 243 027 - 22 243 027
Distributions to investors - (27 765 888) (27 765 888)
Balance at 31 December 2017 960 582 572 2 632 511 963 215 083
STATEMENT OF CASH FLOWS
for the year ended 31 December 2017
2017 2016
R R
Net cash generated from operating activities 28 301 827 23 037 231
Cash utilised by operations (4 951 688) (6 126 258)
Interest received 198 680 205 362
REIT received 31 550 141 1 137 660
Dividend received 1 504 694 27 820 467
Cash inflow from investing activities 44 337 693 86 934 736
Purchase of underlying constituents (166 436 456) (294 040 808)
Sale of underlying constituents 210 774 149 380 975 544
Cash outflow from financing activities (72 103 581) (110 106 885)
Creation of Satrix RAFI 40 Securities 21 990 858 -
Redemption of Satrix RAFI 40 Securities (94 094 439) (110 106 885)
Net movement in cash and cash equivalents 535 939 (134 918)
Cash and cash equivalents at the beginning
of the year 2 276 800 2 411 718
Cash and cash equivalents at the end of the
year 2 812 739 2 276 800
SATRIX RAFI 40 SECURITIES
During the year, 1 600 000 (2016: nil) Satrix RAFI 40 securities were
created at a value of R 21,990,857.97 (2016: R nil) and 7 000 000(2016: 10
000 000) Satrix RAFI 40 securities were redeemed at a value of R94 094
441(2016: R110 106 885). All creations and liquidations were in specie.
Distributions
The Portfolio announces dividends monthly. All distributions that were made
out of income of the Satrix RAFI 40 Portfolio were reinvested back into the
Portfolio net of withholding tax. During the year under review the following
distributions were effected per Satrix RAFI 40 Security.
2017 2016
R R
0.82 cents per security
Declared 03 February and
re-invested 08 February 2017 597 594
0.00 cents per security
Declared 05 February 2016 -
9.44 cents per security
Declared 31 March 2017 and
re-invested 7 April 2017 6 879 614
0.96 cents per security
Declared 01 April 2016 and
re-invested 12 April 2016 757 222
6.27 cents per security
Declared 28 April 2017 and
re-invested 3 May 2017 4 569 405
15.69 cents per security
Declared 29 April 2016 and
re-invested 12 May 2016 12 375 844
0.41 cents per security 298 797
Declared 26 May 2017 and
re-invested 2 June 2017
0.00 cents per security
-
0.65 cents per security
Declared 30 June 2017 and
re-invested 7 July 2017 473 702
0.00 cents per security
Declared 24 June 2016
-
0.09 cents per security
Declared 28 July 2017 and
re-invested 4 August 2017 65 590
0.00 cents per security
Declared 29 July 2016 -
0.68 cents per security
Declared 25 August 2017 and
re-invested 1 September 2017 480 605
0.99 cents per security
Declared 26 August 2016 and
re-invested 14 September 2016 731 385
15.59 cents per security
Declared 29 September 2017 and
re-invested 4 October 2017 10 675 606
8.73 cents per security
Declared 30 September 2016 and
re-invested 12 October 2016
6 362 186
4.08 cents per security
Declared 27 October 2017 and
re-invested 30 October 2017 2 769 393
3.07 cents per security
Declared 28 October 2016 and
re-invested 9 November 2016 2 237 332
0.07 cents per security
Declared 24 November 2017 and
re-invested 29 November 2017 47 234
0.00 cents per security
Declared 25 November 2016 -
0.96 cents per security 47 234
Declared 12 January 2018 and
re-invested 17 January 2018
0.83 cents per security
Declared 30 December 2016 and
re-invested 12 January 2017 -
Accrued income portion of NAV paid
redemption/(creation)of securities 303 467 86 600
Total distributions 27 808 789 23 155 450
Operating Segments
The Satrix RAFI 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 960 582 572 – –
Net assets attributable to
investors – (963 215 083) –
Total 960 582 572 (963 215 083) –
Level 1 Level 2 Level 3
31 December 2016 R R R
Financial instruments
designated at fair value
through profit or loss:
Listed equities 892 779 778 – –
Net assets attributable to
investors – (894 726 645) –
Total 892 779 778 (894 726 645) –
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 – 12 935 –
Cash and cash equivalents – 2 812 739 –
Total – 2 825 674 –
Liabilities
Distributions payable to
investors – – 372 185
Total – – 372 185
Level 1 Level 2 Level 3
31 December 2016 R R R
Assets
Interest receivable – 12 139 –
Cash and cash equivalents – 2 276 800 –
Total – 2 288 939 –
Liabilities
Distributions payable to
investors – – 342 072
Total – – 342 072
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 4 416 478 4 823 312
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 372 185 342 072
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 RAFI 40 Portfolio had a TER of 48.97 (2016: 51.09 (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 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
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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