|
JSE
JSE
JSE - JSE Limited - Audited Annual Financial Statements For The Year
Ended 31 December 2006 and dividend declaration
JSE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2005/022939/06)
Share Code: JSE
ISIN Code: ZAE000079711
("JSE")
Income statements
for the year ended 31 December 2006
Group Exchange Investor
Protection
Funds*
2006 2005 2006 2005 2006 2005
R`000 R`000 R`000 R`000 R`000 R`000
Revenue 640 377 407 999 654 154 421 050 0 0
Other 65 370 25 307 23 627 15 404 41 743 9 906
income
Personnel (162 986) (117 414) (162 986) (117 414) 0 0
expenses
Other (413 561) (276 820) (395 228) (264 465) (10 412) (11 253)
expenses
Profit/ 129 200 39 072 119 567 54 575 31 331 (1 347)
(loss)
before
net
financing
income
Interest 676 190 409 085 35 483 20 545 3 249 7 667
received
Interest (621 450) (370 246) (5 875) (3 544) 0 0
paid
Net 54 740 38 839 29 608 17 001 3 249 7 667
financing
income
Share of 27 364 23 966 - - - -
profit of
equity
accounted
investees
Profit 211 304 101 877 149 175 71 576 34 580 6 320
before
tax
Income (70 254) 5 120 (70 200) 5 124 0 0
tax
Profit 141 050 106 997 78 975 76 700 34 580 6 320
for the
year
Basic 168.0 128.3 94.1 92.0 41.2 7.6
earnings
per share
(cents)
Diluted 167.5 127.9 93.8 91.7 41.1 7.6
earnings
per share
(cents)
* The JSE maintains the JSE Guarantee Fund Trust and the JSE Derivatives
Fidelity Fund Trust for investor protection purposes as required under the
Securities Services Act 36 of 2004. In view of the control that the JSE
exercises over these Trusts, the JSE is required to consolidate them into
the results of the Group in terms of International Financial Reporting
Standards ("IFRS"). However, as these Trusts are legally separate from
the JSE, neither the JSE nor its shareholders have any right to the net
assets of such Trusts.
For enhanced understanding, the investor protection funds have been shown
separately, although, for compliance with IFRS, these results form part of
the Group financial statements.
Balance sheets
as at 31 December 2006
Group Exchange Investor Protection
Funds
2006 2005 2006 2005 2006 2005
R`000 R`000 R`000 R`000 R`000 R`000
Assets
Non-current 517 316 448 457 294 892 350 666 213 919 116 650
assets
Property 213 198 227 022 213 198 227 022 0 0
and
equipment
Investments 54 119 79 342 42 413 95 000 0 0
in
equity
accounted
investees
Investments 0 0 3 201 3 201 0 0
in
subsidiarie
s
Other 213 923 116 654 4 4 213 919 116 650
Investments
Deferred 36 076 25 439 36 076 25 439 0 0
taxation
Current 10 151 448 6 478 006 855 411 374 186 26 020 64 034
assets
Trade 115 694 82 888 56 542 48 268 6 468 5 235
and
other
receivables
Government 4 285 1 005 4 285 1 005 0 0
grants
Due 0 0 5 334 8 173 0 0
from
subsidiarie
s
Due 0 426 0 426 0 0
from
joint
venture
Derivative 1 407 0 1 407 0 0 0
financial
instruments
Margin 9 502 504 6 031 304 308 588 25 287 0 0
deposits
Collateral 22 694 5 908 22 694 5 908 0 0
deposits
Cash and 504 864 356 475 456 561 285 119 19 552 58 799
cash
equivalents
Total 10 668 764 6 926 463 1 150 303 724 852 239 939 180 684
assets
Equity
and
liabilities
Share 833 540 682 604 582 349 522 156 239 742 176 494
capital
and
reserves
Non-current 107 833 77 421 107 833 77 421 0 0
liabilities
Provisions 47 981 14 884 47 981 14 884 0 0
Deferred 11 749 12 799 11 749 12 799 0 0
taxation
Operating 47 333 43 933 47 333 43 933 0 0
lease
liability
Due to 770 5 805 770 5 805 0 0
SAFEX
members
Current 9 727 391 6 166 438 460 121 125 275 197 4 190
liabilities
Trade 148 872 95 017 75 695 58 763 197 178
and
other
payables
Income 25 606 7 680 25 428 7 515 0 0
tax payable
Operating 27 715 24 969 27 715 24 969 0 0
lease
liability
Due 0 0 1 1 273 0 0
to
subsidiarie
s
Due 0 0 0 0 0 4 012
to
holding
company
Derivative 0 1 560 0 1 560 0 0
financial
instruments
Margin 9 502 504 6 031 304 308 588 25 287 0 0
deposits
Collateral 22 694 5 908 22 694 5 908 0 0
deposits
Total 10 668 764 6 926 463 1 150 303 724 852 239 939 180 684
equity
and
liabilities
Cash flow statements
for the year ended 31 December 2006
Group Exchange Investor
Protection
Funds
2006 2005 2006 2005 2006 2005
R`000 R`000 R`000 R`000 R`000 R`000
Cash 223 710 36 548 233 625 55 922 10 882 (5 603)
generated/
(utilised)
by
operations
Interest 652 361 404 553 33 394 20 545 3 249 7 667
received
Interest (584 259) (361 (5 573) (3 544) 0 0
paid 886)
Dividends 4 402 2 689 0 0 4 402 2 689
received
Taxation (64 016) 0 (63 975) 0 0 0
paid
Net cash 232 198 81 904 197 471 72 923 18 533 4 753
inflow from
operating
activities
Cash flows
from
investing
activities
Proceeds on 65 000 0 65 000 0 0 0
redemption
of
preference
shares
Investment (623) (829) (623) (829) 0 0
to maintain
operations
Replacement (623) (857) (623) (857) 0 0
of property
and
equipment
Proceeds on 0 28 0 28 0 0
disposal of
property and
equipment
Investment (79 087) (70 020) (21 307) (64 390) (57 780) (5 630)
to expand
operations
Proceeds 45 168 57 898 0 0 45 168 57 898
on maturity
of other
investments
Additions to (102 948) (63 528) 0 0 (102 (63 528)
other 948)
investments
Purchase of (12 413) 0 (12 413) 0 0 0
shares in
Strate Ltd
Proceeds on 1500 0 1 500 0 0 0
sale of
Itrix
Holdings
(Pty) Ltd
Leasehold (741) (2 841) (741) (2 841) 0 0
improvements
Additions to (9 653) (61 549) (9 653) (61 549) 0 0
property and
equipment
Net cash (14 710) (70 849) 43 070 (65 219) (57 780) (5 630)
(outflow)/
inflow from
investing
activities
Cash flows
from
financing
activities
Proceeds 131 0 131 0 0 0
from issue
of share
capital
Dividends (69 230) 0 (69 230) 0 0 0
paid
Net cash (69 099) 0 (69 099) 0 0 0
outflow from
financing
activities
Net 148 389 11 055 171 442 7 704 (39 247) (877)
increase/
(decrease)
in cash and
cash
equivalents
Cash and 356 475 345 420 285 119 277 415 58 799 59 676
cash
equivalents
at beginning
of year
Cash and 504 864 356 475 456 561 285 119 19 552 58 799
cash
equivalents
at end of
year
Statements of changes in equity
for the year ended 31 December 2006
Non-
Share Share Distributable
Rights Capital Premium Reserve
R`000 R`000 R`000 R`000
Group
Balance at 1 171 119 0 0 10 058
January 2005
Rights (171 119) 8 340 162 779 0
converted to
shares on
demutualisati
on
Shares 0 0 0 0
acquired for
employees
Income and 0 0 0 0
expenses
recognised
directly in
equity
Fair value 0 0 0 0
gains on
available-for-
sale
instruments
Profit for 0 0 0 0
the year
Balance at 31 0 8 340 162 779 10 058
December 2005
BBBEE reserve 0 0 0 0
New issue of 0 131 0 0
shares - The
JSE
Empowerment
Fund
Dividends 0 0 0 0
paid
Income and 0 0 0 0
expenses
recognised
directly in
equity
Fair value 0 0 0 0
gains on
available-for-
sale
instruments
Profit for 0 0 0 0
the year
Balance at 31 0 8 471 162 779 10 058
December 2006
Exchange
Balance at 1 171 119 0 0 0
January 2005
Rights (171 119) 8 340 162 779 0
converted to
shares on
demutualisati
on
Shares 0 0 0 0
acquired for
employees
Profit for 0 0 0 0
the year
Balance at 31 0 8 340 162 779 0
December 2005
BBBEE reserve 0 0 0 0
New issue of 0 131 0 0
shares - The
JSE
Empowerment
Fund
Dividends 0 0 0 0
paid
Profit for 0 0 0 0
the year
Balance at 31 0 8 471 162 779 0
December 2006
Total
BBB Exchange Investor
EE Retained and Protectio Total
n
reserve earnings subsidiaries Funds Group
R`000 R`000 R`000 R`000 R`000
Group
Balance at 1 0 224 082 405 259 153 668 558 927
January 2005
Rights 0 0 0 0 0
converted to
shares on
demutualisati
on
Shares 0 174 174 0 174
acquired for
employees
Income and 0 0 0 16 506 16 506
expenses
recognised
directly in
equity
Fair value 0 0 0 16 506 16 506
gains on
available-for-
sale
instruments
Profit for 0 100 677 100 677 6 320 106 997
the year
Balance at 31 0 324 933 506 110 176 494 682 604
December 2005
BBBEE reserve 50 317 0 50 317 0 50 317
New issue of 0 0 131 0 131
shares - The
JSE
Empowerment
Fund
Dividends 0 (69 230) (69 230) 0 (69 230)
paid
Income and 0 0 0 28 668 28 668
expenses
recognised
directly in
equity
Fair value 0 0 0 28 668 28 668
gains on
available-for-
sale
instruments
Profit for 0 106 470 106 470 34 580 141 050
the year
Balance at 31 50 317 362 173 593 798 239 742 833 540
December 2006
Exchange
Balance at 1 0 274 163 445 282
January 2005
Rights 0 0 0
converted to
shares on
demutualisati
on
Shares 0 174 174
acquired for
employees
Profit for 0 76 700 76 700
the year
Balance at 31 0 351 037 522 156
December 2005
BBBEE reserve 50 317 0 50 317
New issue of 0 0 131
shares - The
JSE
Empowerment
Fund
Dividends 0 (69 230) (69 230)
paid
Profit for 0 78 975 78 975
the year
Balance at 31 50 317 360 782 582 349
December 2006
Notes
1) Headline earnings per share
The calculation of headline earnings per share at 31 December 2006 of
158.3 (2005: 122.0) cents per share was based on the headline earnings of
R132.9m (2005: R101.8m) and a weighted average number of ordinary shares
of 83 934 476 (2005: 83 402 500) during the period.
R`000 Group 2005 Exchange 2005
2006 2006 R`000
R`000
Reconciliation of
headline earnings:
Profit for the year 141 050 106 997 78 975 76 700
Adjustments are
made to the
following:
Loss on sale of 4 3 4 3
property and
equipment
Impairment loss on 3 803 0 3 803 0
property and
equipment
Profit on sale of (1 283) 0 (1 283) 0
joint venture
Profit on (10 707) (5 213) 0 0
realisation of
available-for-sale
instruments
Headline earnings 132 867 101 787 81 499 76 703
Headline earnings 158.3 122.0 97.1 92.0
per share (cents)
2) Actual number of
shares in issue
The 2006 figures
include the
subdivision of
Shares on 5 June:
10 for 1
Shares in issue at 84 705 663 8 340 250 84 705 663 8 340 250
31 December - fully
paid
Weighted average 83 934 476 83 402 500 83 934 476 83 402 500
number of ordinary
shares at 31
December
3 Contingent liabilities and
commitments
3.1 Contingent liabilities
The JSE has a contingent liability as a result of the JSE guaranteeing
the settlement of central order book equity market trades in the event
that one member fails to settle. This risk is mitigated through various
mechanisms, being the member firms` deposits and bank guarantees
(R3.7m), the JSE Guarantee Fund Trust and the JSE`s own trade monitoring
system. The JSE retains reserves to meet these contingent liabilities.
The JSE is currently engaged in arbitration with a former supplier for
alleged breach of contract by the JSE. The case was split between
merits and quantum. The JSE lost on merits and the quantum has not yet
been established. The JSE expects the quantum to fall in the range nil
to R25.0 million.
The JSE is one of 25 defendants who have been served with a summons
relating to losses realised by a pension fund in the amount of
approximately R1.4 billion. This is in the early stages of the legal
process and an exception has been filed by the JSE. Senior Counsel
opinion on this matter is that the claim is unfounded. The JSE is
defending the claim.
3.2 Commitments
The JSE leases a building and accounts for the lease as an operating
lease. The lease commenced on 1 September 2000 for a period of 15 years.
On termination of the lease, should the landlord wish to sell the
building, the JSE has an option to buy the building at a price yet to be
determined. The operating lease payments escalate at 11% per annum.
The JSE is party to agreements for the development of software totalling
approximately R215.2 million (2005: R206.2 million) over the next two
years, of which R146.8 million (2005: R144.9 million) has been settled.
The IT transformation project is currently running behind schedule and the
JSE is in discussions with the service provider regarding payment of
further amounts towards the fixed fee for resolution of scope items. If
the JSE unduly delays the implementation of the project, the JSE may have
to pay further amounts but a delay caused by the JSE is considered
unlikely.
COMMENTARY ON THE AUDITED ANNUAL FINANCIAL STATEMENTS OF THE JSE LIMITED FOR
THE YEAR ENDED 31 DECEMBER 2006
Highlights
2006 was a phenomenal year for the JSE Limited (JSE). The JSE listed on the
Main Board on 5 June 2006. Trading commenced at R26 per share with the final
trade for the year under review being R52.50 per share, an increase of 102%
in just under 6 months. The FTSE/JSE All Share Index ended the year on a
record high for the third year in a row. Volumes and value traded on the
equities market also reached unprecedented levels. The JSE maintained its
record of zero failed trades. There were 14 new main board listings and 23
new entries onto the AltX market. The average monthly number of single stock
futures (SSF) contracts traded in 2006 was up 185% on 2005 and moved the JSE
into second place amongst exchanges globally in terms of numbers of SSF
contracts traded. This contributed to a more than doubling of the average
monthly number of equity derivative contracts traded during 2006. All these
factors have driven revenues upward.
Overview of results
The JSE Group recorded a strong performance for the year under review,
attributable mainly to strong world markets and controlled costs. Group
revenue from operations increased by 57% to R640.4 million while operating
costs were contained to under 11% increase over to 2005.
Included for the first time in Group revenue, is an amount of R57 million
which arose as a result of the revision of the service level agreement
between the JSE and Strate Limited ("Strate") in terms of which Strate
provides settlement services to the equities market. Equities members were
previously charged directly by Strate for these services, whereas now the JSE
is billed by Strate and in turn passes these same charges on to members.
While the impact on the bottom line is nil, there is a marked increase in the
revenue and cost lines.
Other income, including interest income increased by R40 million or 158%. Of
this, R26 million related to a non-recurring performance bonus received on an
insurance product by the JSE Guarantee Fund Trust.
Personnel costs increased by R46 million, of which R32 million was a
consequence of the implementation of the Long Term Incentive Scheme, a scheme
designed to retain key senior employees. This is a cash settled bonus scheme
which settles in three tranches and pays participants based on the
performance of the JSE share price.
More detail on this is set out in note 20.6 to the Annual Financial
Statements, which will be posted to shareholders in due course.
Other expenses include the cost of the Broad-Based Black Economic Empowerment
(Broad- Based BEE) initiative, amounting to R39 million for the sale of
shares at par value to the JSE Empowerment Fund (JEF). JEF is designed to
educate black students who are studying for an appropriate tertiary level
qualification in the financial markets. The second element of the Broad
Based-BEE initiative, the Black Shareholder Retention Scheme, (the BSR
Scheme) cost R12 million in the year under review. The BSR Scheme is aimed
at incentivising the JSE`s black shareholders to retain their JSE
shareholding at least until 2011. In terms of the BSR Scheme, holders of JSE
Shares who are black and who acquired JSE Shares on or before 28 March 2006
and still held them at that date, are considered to be Qualifying Black
Shareholders. Qualifying Black Shareholders are issued options on each of
three dates (in June of 2006, 2007 and 2008) entitling them to acquire
additional JSE shares in 2011 at an 80% discount to the ruling price on the
date the options are granted. The first tranche of 579 183 options was
issued in June 2006 at a strike price of R4.81 per share and cost R12
million.
Net financing income has improved considerably on the back of increased
values invested and the general increase in interest rates.
Strate Limited too has benefited from the strong market conditions,
delivering a return of R27 million to the JSE for its equity accounted
investment, an improvement of 14% on the previous year.
The JSE lost its tax exemption with effect from 1 July 2005, and accounted
for the main portion of the deferred tax at that time. The tax impact of R70
million being seen in the current year is exacerbated by the fact that the
cost of the Broad-Based BEE initiative (totaling R50 million) is not
deductible for tax purposes. The deferred tax quantum as referred to in the
revised trading statement of 23 February 2007 has been finalised and details
are included in the Annual Financial Statements to be posted to shareholders
in due course.
Despite the cost of the Broad-Based BEE initiative and the Long Term
Incentive Scheme, the Group has achieved after tax profits for the year of
R141 million, an increase over the previous year of 32%.
Basic Earnings per share increased to 168.0 cents per share (2005: 128.3
cents per share) and Diluted Earnings per share increased to 167.5 cents per
share (2005: 127.9 cents per share).
The JSE Guarantee Fund Trust and JSE Derivative Fidelity Fund Trust are
consolidated in terms of International Financial Reporting Standards(IFRS).
This is as a result of the control the JSE is able to exercise over these
trusts. The trusts are legally separate from the JSE and shareholders do not
have any right to the net assets of such trusts.
Trade and other receivables increased by R33 million as a result of interest
receivable on margins amounting to R24 million and trade receivables on
higher revenues amounting to R8 million.
Trade and other payables increased by R54 million, of which R37 million
relates to the interest payable on margins.
Net Asset Value per share has increased by 20% to 984.0 cents in the current
year.
Dividend
The directors of the JSE are proposing to declare ordinary dividend number 2
of 15.6 cents per share to be approved at the Annual General Meeting of
Shareholders to be held on 24 April 2007.
The salient dates for the payment of the dividend are as follows:
Last date to trade JSE shares cum Friday, 4 May 2007
dividend
JSE shares trade ex dividend Monday, 7 May 2007
Record date for purposes of Friday, 11 May 2007
determining the registered holders
of JSE Shares to participate in
the dividend at close of business
on
Date of payment of dividend Monday, 14 May 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 7 May 2007 and Friday, 11 May 2007, both days inclusive.
Prospects
There has been no change to the JSE`s ongoing strategy which is to provide
world-class trading, clearing and settlement facilities to its users, thereby
enhancing the attractiveness of South African investment products.
In the coming year, the Yield-X platform will host the recently announced
Currency Futures trading. We will continue to seek further opportunities to
reduce costs and drive synergies in the financial markets as the JSE works
with its stakeholders to position South Africa as a world class,
competitively priced investment destination.
Stakeholders are reminded that the JSE`s earnings are impacted, amongst other
things, by the volumes of transactions executed on the JSE. The JSE does not
control these volumes and has a largely fixed cost base. At the same time,
the JSE will start to depreciate the Orion expenses and will need to expense
the costs of both aspects of the Broad-based BEE initiative as well as the
Employee Long Term Incentive Scheme during 2007. All these expenses will
impact the profit the JSE is able to show for 2007.
Basis of preparation
The consolidated financial statements are prepared in accordance with, and
comply with IFRS. The Group includes the JSE and the assets, liabilities and
results of the operations of the SAFEX Clearing Company (Pty) Ltd, the JSE
Derivatives Fidelity Fund Trust, the JSE Guarantee Fund Trust and JSE
Trustees (Pty) Ltd.
Changes in accounting policies
Accounting policies of the Group are consistent with those adopted in the
prior
year.
Audit opinion
These abridged financial results have been extracted from the audited
financial
statements on which KPMG Inc has issued an unqualified audit report. This
report is available for inspection at the JSE`s registered offices.
Date: 13/03/2007 15:47:19 Produced by the JSE SENS Department.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
