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Abridged Results for the Year Ended 31 December 2017 - STXQUA
SATRIX QUALITY
JSE code: STXQUA
ISIN: ZAE000247987
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
R
Income
Dividend income 297 973
Interest income 15 576
Total income 313 549
Expenses
Management fee (26 210)
Trustee and custodian fees (5 130)
Transaction costs (10 759)
Total operating expenses (42 099)
Income attributable to investors before
distribution 271 450
Income distributions (345 172)
Income attributable to investors after
distributions (73 722)
Realised gains on financial instruments
designated at fair value through profit or
loss 1 161 777
Unrealised gains on financial instruments
designated at fair value through profit or
loss 6 809 316
Total fair value adjustments 7 971 093
Increase in net assets attributable to
investors after distributions 7 897 371
STATEMENT OF FINANCIAL POSITION
at 31 December 2017
2017
R
ASSETS
Listed equities designated as held at fair
value through profit or loss 44 577 777
Interest receivable 1 592
Cash and cash equivalents 337 991
Total assets 44 917 360
LIABILITIES
Distributions payable to investors 403 172
Other payables 10 133
Net assets attributable to investors 44 504 055
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 31 December 2016 - - -
Creations of Quality
Securities 36 606 684 - 36 606 684
Increase in net assets
attributable to investors
after distributions 7 971 093 (73 722) 7 897 371
Balance at 31 December 2017 44 577 777 (73 722) 44 504 055
STATEMENT OF CASH FLOWS
for the year ended 31 December 2017
2017
R
Net cash generated from operating
activities 279 991
Cash utilised by operations (31 966)
Interest received 13 984
Dividend received 297 973
Cash outflow from investing activities (36 606 684)
Purchase of underlying constituents (45 967 751)
Sale of underlying constituents 9 361 067
Cash inflow from financing activities 36 664 684
Creation of Satrix Quality Securities 36 606 684
Accrued income portion of NAV received on
creation of securities 58 000
Net increase in cash and cash equivalents 337 991
Cash and cash equivalents at the beginning
of the year -
Cash and cash equivalents at the end of
the year 337 991
SATRIX QUALITY SECURITIES
During the year, 4 636 570 Satrix Quality securities were created at a value
of R36 606 684. All creations were in specie.
Distributions
The Portfolio effects quarterly distributions. All distributions are made
out of income of the Satrix Quality South Africa Portfolio. The record date
is 12 January 2018.
During the year under review the following distributions were effected per
Satrix Quality Security.
2017
R
6.57 cents per security
Declared 12 January 2018 and
paid 17 January 2018 403 172
Accrued income portion of NAV paid
/(received) on redemption / (creation) of
securities (58 000)
Total distributions 345 172
Operating Segments
The Satrix Quality 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 44 577 777 - –
Net assets attributable to
investors - (44 602 604) –
Total 44 577 777 (44 602 604) –
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 – 1 592 –
Cash and cash equivalents – 337 991 –
Total – 339 583 -
31 December 2017 R R R
Liabilities
Distributions payable to
investors – – 304 623
Other payables – – 10 133
Total – – 314 756
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
R
Management fee paid
Satrix Managers (RF) Proprietary Limited 16 077
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 10 133
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 Quality South Africa Portfolio was launched in February 2017. As
the fund is not older than 1 year, the annualised TER cannot be calculated.
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. The Portfolio does
not expect a significant impact on its equity due to the short term nature
of the 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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