| Wed 29 Jun 2011, 17:15 | | RAFFIN - Newfunds ErafiTrade Mark SA Financial 15 Index ETF - Summarised audited |
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JSE RAFFIN
NFS
RAFFIN - Newfunds ErafiTrade Mark SA Financial 15 Index ETF - Summarised audited
results for the year ended 31 March 2011
NEWFUNDS eRAFITrade Mark SA FINANCIAL 15 INDEX ETF
Share code: RAFFIN
ISIN: ZAE000134979
A Portfolio in the NewFunds Collective Investment Scheme in Securities
registered as such in terms of the Collective Investment Schemes Control Act, 45
of 2002
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2011
Statement of financial position as at 31 March 2011
2011 2010
R R
ASSETS
Non-current assets
Investments: eRAFITrade Mark Financial 25 234 334 24 392 019
Portfolio
Current assets 226 538 356 327
Trade and other receivables 88 531 63 172
Cash and cash equivalents 138 007 293 155
TOTAL ASSETS 25 460 872 24 748 346
LIABILITIES
Trade and other payables 101 796 141 536
NET ASSETS ATTRIBUTABLE TO INVESTORS 25 359 076 24 606 810
Statement of comprehensive income for the year ended 31 March 2011
2011 2010
R R
Income 773 047 436 113
Dividend income 761 769 432 331
Interest income 11 278 3 782
Realised gains on financial instruments 980 235 326 907
designated at fair value through profit
or loss
Unrealised (loss)/gains on financial (939 747) 6 491 776
instruments designated at fair value
through profit or loss
Expenses
Management and administration expenses (323 211) (407 826)
Decrease in net assets attributable to 490 324 6 846 970
investors before tax
Income tax expense - -
Increase in net assets attributable to 490 324 6 846 970
investors before distribution
Income distribution (268 054) -
Increase in net assets attributable to 222 270 6 846 970
investors after distribution
Represented by:
Income attributable to investors 181 782 28 287
Capital gain attributable to 40 488 6 818 683
investors
Statement of changes in net assets attributable to investors for the year ended
31 March 2011
Capital Income Net assets
attributable attributable attributable
to investors to investors to investors
R R R
New creation of eRAFITrade Mark 17 759 840 - 17 759 840
Financial securities
Increase in net assets attributable 6 818 683 28 287 6 846 970
to investors
Balance at 31 March 2010 24 578 523 28 287 24 606 810
New creation of eRAFITrade Mark - - -
Financial securities
Increase in net assets attributable 40 488 181 782 222 270
to investors
Capital dividends received 529 996 - 529 996
Balance at 31 March 2011 25 149 007 210 069 25 359 076
Statement of cash flows for the year ended 31 March 2011
2011 2010
R R
Net cash (utilised)/ (173 550) 293 155
generated from operating
activities
Cash utilised from (388 310) (329 462)
operations
Purchases of securities (10 056 005) (2 975 077)
Proceeds from sale of 9 765 772 3 161 581
securities
Interest received 11 278 3 782
Dividend received 761 769 432 331
Dividend paid (268 054) -
Cash inflow from investing 18 402 -
activities
Capital distributions re- 18 402 -
invested
Net movement in cash and (155 148) 293 155
cash equivalents
Cash and cash equivalents at 293 155 -
the beginning of year
Cash and cash equivalents at 138 007 293 155
the end of year
NOTES TO THE SUMMARISED FINANCIAL STATEMENTS FOR ALL PORTFOLIOS ("funds") FOR
THE YEAR ENDED 31 MARCH 2011
1. Accounting policies
The NewFunds Collective Investment Scheme ("the Scheme") is an open-ended
investment scheme incorporated under the Collective Investment SchemeS Control
Act, 40 OF 2002.
The Scheme`s objective is to track the eRAFITrade Mark Financial 15 index
calculated daily by the independent investment consulting firm Riscura. The ETF
invests in 15 companies that fall within the financial sector based on their
underlying value indicators as opposed to market capitalisation.
The scheme is mainly managed by Absa Capital, a division of Absa Bank Limited.
The financial information incorporates the principal accounting policies set out
below which have been applied consistently by NewFunds Collective Investment
Scheme for all periods presented.
1.1 Statement of compliance
The financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards
Board (IASB), the AC500 standards as issued by the Accounting Practice Board,
IAS 34 Interim Financial Reporting and the manner required by the Collective
Investment Schemes Control Act and Trust Deed.
The financial statements were authorised for issue by the Board of Directors on
24 June 2011.
1.2 Basis of measurement
The financial statements have been prepared on a historical cost basis, except
where specifically indicated otherwise in the accounting policies.
1.3 Functional and presentation currency
Items included in the financial statements of the funds are measured using the
currency of the primary economic environment in which the entity operates (the
functional currency). The fund`s financial statements are presented in South
African Rand, which is the fund`s functional and presentation currency.
1.4 Financial instruments
Recognition and measurement
Regular way purchases and sales of financial instruments are accounted for on
trade date. All other financial instruments are recognised when the entity
first becomes a party to the contractual provisions of the instrument.
Financial instruments are recognised initially at fair value plus directly
attributable transaction costs which are only included in the initial carrying
amount of financial instruments that are not designated through profit or loss.
Subsequent to initial recognition, these instruments are measured as set out
below.
Investments
Investments are designated at fair value through profit or loss at inception
and are financial instruments that are not classified as held for trading but
are managed, and their performance is evaluated on a fair value basis in
accordance with the Fund`s documented investment strategy. Fair value is
determined with reference to quoted market prices as published in the financial
press, at reporting date. All changes in fair value, other than dividend
income, are recognised in profit or loss as a net gain/(loss) from financial
instruments at fair value through profit or loss.
The Fund`s policy requires the Asset Managers and Investment Manager Committee
to evaluate the information about these investments on a fair value basis
together with other related financial information. These investments are
expected to be realised at any time at the option of the security holder.
Trade and other receivables
Trade and other receivables are measured at amortised cost using the effective
interest method, less impairment losses. Trade and other receivables are short
term in nature and are not discounted. The carrying value approximates the
fair value.
Cash and cash equivalents
Comprises of cash balances and call deposits with an original maturity of three
months or less measured at amortised cost at reporting date. The carrying value
approximates the fair value.
Trade and other payables
Measured at amortised cost using the effective interest method. The carrying
value approximates the fair value.
The effective interest method is a method of calculating the amortised cost
of a financial liability and of allocating the interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments or receipts throughout the expected life of
the financial instrument, or, when appropriate, a shorter period, to the net
carrying amount of the financial instrument.
The calculation includes all fees and points paid or received between parties to
the contract that are an integral part of the effective interest rate,
transaction costs and all other premiums or discounts.
Issued securities
Financial liabilities arising from securities issued by each portfolio are
measured at fair value representing the investor`s right to an interest in
the portfolio`s net asset, i.e. the Net Asset Value ("NAV") of the portfolio.
The NAV is the total assets of the portfolio less trade and other payables.
Changes in the fair value are included in profit or loss in the period in which
the change arises and these financial liabilities are designated through
profit or loss.
The fair value of redeemable securities is measured at the redemption amount
that is payable (in cash and in securities, representing each investor`s
undivided and vested interest in their assets as a whole, subject to
liabilities, as defined by the Scheme`s Trust Deed).
In accordance with the Scheme`s Trust Deed, and CISCA, the portfolios are
contractually obliged to redeem securities at Net Asset Value.
Creations and redemptions
Creations and redemptions are recorded on trade date using historic cost
being the previous day closing index price.
Amortised cost is calculated by taking into account any discount or premium on
acquisition, and fees and costs that are an integral part of the effective
interest rate. The amortisation is included in "Interest income" in profit
and loss. The carrying amount of impaired loans on the statement of financial
position is reduced through the use of impairment.
Redeemable securities
All redeemable securities provided by the portfolios provide investors with the
right to request redemption for cash or in specie at the value proportionate to
each investor`s share. The securities are redeemable at any time at the option
of the security holder and are therefore classified as financial liabilities.
1.5 Derecognition of financial instruments
Derecognition of financial assets
The Scheme derecognises a financial asset when and only when:
- The contractual rights to the cash flows arising from the financial assets
have expired or been forfeited by the Scheme; or
- It transfers the financial asset including substantially all the risks and
rewards of ownership of the assets; or
- It transfers the financial asset, neither retaining nor transferring
substantially all the risks and rewards of ownership of the asset, but no
longer retains control of the assets.
A financial liability is derecognised when and only when the liability is
extinguished, that is, when the obligation specified in the contract is
discharged, cancelled or has expired.
On derecognition of a financial asset in its entirety, the difference between
the carrying amount and the sum of the consideration received (including any
new asset obtained less any new liability assumed) is recognised in profit or
loss.
The difference between the carrying amount of a financial liability (or part
thereof) extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss.
1.6 Impairments
A financial asset not carried at fair value through profit or loss is assessed
at each reporting date to determine whether there is any objective evidence
that it is impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of that asset.
Objective evidence that a financial asset is impaired includes observable data
that comes to the attention of the company and may include the following loss
event:
- The disappearance of an active market for that financial asset because of
financial difficulties.
An impairment loss in respect of a financial asset measured at amortised cost
is calculated as the difference between the asset`s carrying amount, and the
present value of estimated future cash flows discounted at the financial asset`s
original effective interest rate. All impairment losses are recognised in profit
or loss.
1.7 Offsetting
Financial assets and liabilities are offset and the net amount reported in the
statement of financial position when the entity holds a current legally
enforceable right to set off the recognised amounts and intends to either
settle on a net basis, or realise the asset and settle the liability
simultaneously.
1.8 Fair value
Some of the Scheme`s financial instruments are measured at fair value through
profit or loss, namely those designated by management under the fair value
option.
The fair value of a financial instrument is the amount at which the instrument
can be exchanged in a current transaction between willing parties, other than in
a forced or liquidation sale.
The method of determining the fair value of financial instruments can be
analysed into the following categories:
a) Unadjusted quoted prices in active markets where the quoted price is
readily available and the price represents actual and regularly occurring
market transactions on an arm`s length basis.
b) Valuation techniques using market observable inputs. Such techniques may
include:
- using recent arm`s length market transactions;
- reference to the current fair value of similar instruments; and
- discounted cash flow analysis, pricing models or other techniques commonly
used by market participants.
c) On initial recognition of financial instruments measured using the above
techniques the transaction price is deemed to provide the best evidence
d) of fair value for accounting purposes. As such, profits or losses are
recognised upon trade inception only when such profits can be measured solely by
reference to observable market data. The difference between the model valuation
and the initial transaction price is either amortised over the life of the
transaction, deferred until the instrument`s fair value can be determined using
market observable inputs, or realised through settlement.
The valuation techniques in (b) and (c) use inputs such as interest rate yield
curves, equity prices, commodity and currency prices/yields, volatilities of the
underlying and correlations between inputs. The models used in these valuation
techniques are calibrated against industry standards, economic models and to
observed transaction prices where available.
The best evidence of fair value at initial recognition is the transaction price
(i.e. the fair value of the consideration given or received), unless the fair
value of that instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without modification
or repackaging) or based on a valuation technique whose variables include only
data from observable markets. The Scheme has entered into transactions, some
of which will mature within one year, where fair value is determined using
valuation models for which all inputs are market observable prices or rates.
Such a financial instrument is initially recognised at the transaction price,
which is the best indicator of fair value, this does not substantially differ
from the relevant valuation model.
1.9 Income
Income comprises interest income and dividend income.
Investment income is that income that is directly related to the return from
individual investments. It is recognised to the extent that it is probable
that there will be an inflow of economic benefits and the income can be reliably
measured.
Interest income is recognised on a time-proportionate basis using the effective
interest method and includes interest income from debt securities.
Dividends from equity investments are recognised in the statement of
comprehensive income when the shareholders` rights to receive payment have been
established except to the extent that dividends, clearly reflects a realisation
of the underlying investments.
1.10 Distributions
In accordance with the Scheme`s Trust Deed, the portfolios distribute their
distributable income and any other amounts determined by the management company
to security holders in cash. The distributions are payable at the end of each
quarter.
1.11 Fair value gains and losses
Realised profits or losses on the disposal of investments is the difference
between the fair value of the consideration received less any directly
attributable costs, on the sale of equity investments and the repayment of
loans and receivables, and its carrying value at the start of the full
reporting period.
Unrealised profits or losses on the revaluation of investments are the
cumulative movements in the carrying value of investments for every month in
the reporting period.
1.12 Management and administration expenses
Management and administration expenses are recognised in profit or loss when a
decrease in future economic benefits related to decrease in an assets or an
increase of a liability has arisen that can be measured reliably.
It is recognised based on the matching concept where expenses are matched
with income.
1.13 Taxation
Income is taxed in the hands of the investor if distributed within 12 months,
failing which revenue will be deemed to be received by and accrued to the
portfolio and will be taxed in its hands. Capital gains and losses are
disregarded.
1.14 Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
1.15 Provisions
Provisions are recognised when the scheme has a present legal or constructive
obligation as a result of past events, for which it is probable that an
outflow of economic benefits will occur, and where a reliable estimate can be
made of the amount of the obligation. Where the effect of discounting is
material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
Future operating costs or losses are not provided for.
1.16 New standards and interpretations adopted in the current year
There are no new standards adopted in the current year.
1.17New standards and interpretations not yet adopted
There are new standards, interpretations and amendments to standards and
interpretations relevant to the entity that are not yet effective for the
year ended 31 March 2011 and have not been applied in preparing the financial
statements. These include the following standards and interpretations that are
applicable to the business of the entity and may have an impact on the future
financial statements:
IAS 24 Related Party Disclosures
The revised IAS 24 Related Party Disclosure amends the definition of a
related party and modifies certain related party disclosure requirements for
government-related entities. Amendments are effective for annual periods
beginning on or after 1 January 2011. The amendment might affect the
disclosure of the fund`s related parties in the financial statements.
IFRS 9 Financial Instruments
IFRS 9 retains but simplifies the mixed measurement model and establishes two
primary measurement categories for financial assets: amortised cost and fair
value. The basis of classification depends on the entity`s business model and
contractual cash flow characteristics of the financial asset. The guidance in
IAS 39 on Impairment of financial assets and hedge accounting continues to
apply. Amendments are effective for the annual periods beginning on or
after 1 January 2013. The Amendment might affect disclosure of NewFunds CIS
financial instruments in the financial statements.
1.18 Operating Segments
The portfolios, eRAFITrade Mark Overall, NewSA, Shariah, eRAFITrade Mark
Financial, eRAFITrade Mark Industrial, eRAFITrade Mark Resources, that trade
under the umbrella of the NewFunds Collective Investment Schemes (CIS) as
separate exchange traded funds. Each
of the mentioned funds is separately listed and trades on the JSE. Thus each
of the separate portfolios fall within the scope of IFRS 8:
Operating Segments.
Comparative segment information has been presented in conformity with the
transitional requirements of such standards. The application of the standard
only impacts the presentation and disclosure aspect of the financial
statements.
Audit report
KPMG Inc, the NewFunds Collective Investment Scheme`s independent auditor,
has audited the annual financial statements of the NewFunds eRAFITrade Mark SA
Financial 15 Index ETF from which the summarised results contained in this
announcement have been derived, and has expressed an unmodified opinion on the
annual financial statements. Their audit report is available for inspection at
the CIS`s registered office.
The complete set of financial statements are available on Absa Capital`s website
(www.absacapitaletfs.com).
Sponsor:
J.P. Morgan Equities Limited
Date: 29/06/2011 17:15:01 Produced by the JSE SENS Department.
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