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Abridged Results for the Year Ended 31 December 2017 - STXIND
SATRIX INDI
JSE code: STXIND
ISIN: ZAE000036364
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 42 232 881 45 458 622
Interest income 276 358 400 330
Total income 42 509 239 45 858 952
Expenses
Management fee (8 690 955) (8 307 209)
Transaction costs ( 489 896) (1 969 209)
Trustee and custodian fees ( 99 091) (100 485)
Total operating expenses (9 279 942) (10 376 903)
Income attributable to investors before
distribution 33 229 297 35 482 049
Income distributions (31 577 837) (35 292 204)
Income attributable to investors after
distributions 1 651 460 189 845
Realised gains on financial instruments
designated at fair value through profit or
loss 20 959 602 336 056 793
Unrealised gains / (losses) on financial
instruments designated at fair value through
profit or loss 419 367 807 (560 825 685)
Total fair value adjustments 440 327 409 (224 768 892)
Increase / (decrease) in net assets
attributable to investors after
distributions 441 978 869 (224 579 047)
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 2 355 359 492 1 914 920 725
Interest receivable 53 741 26 666
Other receivables 1 253 339 30 040
Cash and cash equivalents 11 177 979 5 394 745
Total assets 2 367 844 551 1 920 372 176
LIABILITIES
Distributions payable to investors 8 993 437 3 803 986
Other payables 776 936 584 239
Total liabilities (excluding net assets
attributable to investors) 9 770 373 4 388 255
Net assets attributable to investors 2 358 074 178 1 915 983 951
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO INVESTORS
for the year ended 31 December 2017
Capital Income Net assets
attributable attributable attributable
to investors to investors to investors
R R R
Balance at 01 January 2016 2 209 277 809 873 381 2 210 151 190
Redemption of Satrix INDI
Securities (69 588 192) - (69 588 192)
Decrease in net assets
attributable to investors
after distributions (224 768 892) 189 945 (224 579 047)
Balance at 31 December 2016 1 914 920 725 1 063 226 1 915 983 951
Creation of Satrix INDI
Securities 11 796 358 - 11 796 358
Redemption of Satrix INDI
Securities (11 685 000) - (11 685 000)
Increase in net assets
attributable to investors
after distributions 440 327 409 1 651 460 441 978 869
Balance at 31 December 2017 2 355 359 492 2 714 686 2 358 074 178
STATEMENT OF CASH FLOWS
for the year ended 31 December 2017
2017 2016
R R
Net cash generated from operating activities 32 171 620 35 360 913
Cash utilised by operations (10 310 544) (10 529 082)
Interest received 249 283 431 373
Dividend received 42 232 881 45 458 622
Cash inflow /(outflow) from investing
activities (111 358) 69 588 192
Purchase of underlying constituents (106 842 966) (609 650 451)
Sale of underlying constituents 106 731 608 679 238 643
Cash (outflow)/inflow from financing
activities (26 277 028) 27 293 226
Creation /(Redemption)of Satrix INDI
Securities 111 358 (69 588 192)
Cash distributed to security holders (26 388 386) (42 294 966)
Net increase / (decrease) in cash and cash
equivalents 5 783 234 (6 934 053)
Cash and cash equivalents at the beginning
of the year 5 394 745 12 328 798
Cash and cash equivalents at the end of the
year 11 177 979 5 394 745
SATRIX INDI SECURITIES
During the year, 150 000(2016: nil) Satrix INDI securities were created at a
value of R 11 796 358(2016: nil) and 150 000 (2016: 1 000 000) Satrix INDI
securities were redeemed at a value of R 11 685 000(2016: R 69 588 192). All
creations and liquidations were in specie.
Distributions
The Portfolio effects quarterly distributions. All distributions are made
out of income of the Satrix INDI 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 INDI Security.
2017 2016
R R
43.6 cents per security
Declared 31 March 2017 and
paid 7 April 2017 12 987 767
14.44 cents per security
Declared 1 April 2016 and
paid 14 April 2016 4 445 853
6.15 cents per security
Declared 30 June 2017 and
paid 6 July 2017 1 831 990
25.67 cents per security
Declared 24 June 2016 and paid
22 July 2016 7 903 397
25.92 cents per security
Declared 29 September 2017 and
paid 4 October 2017 7 747 088
62.65 cents per security
Declared 30 September 2016 and
Paid 12 October 2016 18 662 468
30.09 cents per security
Declared 12 January 2018 and
paid 17 January 2018 8 993 437
12.77 cents per security
Declared 30 December 2016 and
paid 12 January 2017 3 803 986
Accrued income portion of NAV paid
/(received) on redemption / (creation) of
securities 17 555 476 500
Total distributions 31 577 837 35 292 204
Operating Segments
The Satrix INDI 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 2 355 359 492 – –
Net assets attributable to
investors - (2 358 074 178) –
Total 2 355 359 492 (2 358 074 178) –
Level 1 Level 2 Level 3
31 December 2016 R R R
Financial instruments
designated at fair value
through profit or loss:
Listed equities 1 914 920 725 – –
Net assets attributable to
investors - (1 915 983 951) –
Total 1 914 920 725 (1 915 983 951) –
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 – 53 741 –
Other receivables – – 1 253 339
Cash and cash equivalents – 11 177 979 –
Total – 11 231 720 1 253 339
Level 1 Level 2 Level 3
31 December 2017 R R R
Liabilities
Distributions payable to
investors – – 8 993 437
Other payables – – 776 936
Total – – 9 770 373
Level 1 Level 2 Level 3
31 December 2016 R R R
Assets
Interest receivable – 26 666 –
Other receivables – – 30 040
Cash and cash equivalents – 5 394 745 –
Total – 5 421 411 30 040
Level 1 Level 2 Level 3
31 December 2016 R R R
Liabilities
Distributions payable to
investors – – 3 803 986
Other payables – – 584 239
Total – – 4 388 225
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 7 130 574 8 475 471
Management fee payable at 31 December
Satrix Managers (RF) Proprietary Limited 776 936 584 239
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 INDI Portfolio had a TER of 40.01 (2016: 39.82 (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 2016 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 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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