MADISON UNIT TRUST-INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2017

Transcription

1 MADISON UNIT TRUST-INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2017 Madison Asset Management Company Limited Tel / Fax Dar-es- Salaam Place, south of main Post Office, Cairo Road Lusaka Madisonassets.co.zm

2 Table of Contents Contents To Our Holders of Units 1 3 Notes to Financial Statements 19 General Information 21

3 Pg. 01 To Our Holders of Units To Our Holders of Units Market highlights- Performance of the local economy during the period under review was underlined by the following indicators. a) Inflation - Consumer price index (CPI) inflation decelerated on the back of lower food- and non-food price growth over the first five months of the year. Specifically, headline CPI slowed by 0.2 percentage points to a current-year low of 6.8% y-o-y in June. b) Exchange rates-conservative monetary policy and the absence of high-profile external risk events underpinned kwacha stability during the first half of the year. With regard to external factors, the resumption of interest rate normalization on US soil delivered no surprises on account of clear and concise forward guidance by the Federal Open Markets Committee (FOMC) in the lead-up to the March 15 announcement. On the domestic front, the positive real interest rate differential and improved foreign appetite for government debt securities supported sustained kwacha resilience notwithstanding further unwinding of tight liquidity conditions. The local currency remained stable during the first half and closed at ZMW9.14/$ on 30 June 2017, slightly lower than that the ZMW9.8972/$ recorded as at 31st December c) Money Markets- The benchmark yield curve bear-flattened over the past 18 months as high growth in consumer prices was counterweighed by robust long-term growth potential. Rapid disinflation on the back of substantial base effects and slower growth in monetary aggregates allowed for monetary policy easing, while improved kwacha resilience provided an attractive entry point for foreign investors. d) Capital Markets- Listed equity regained balance after a tumultuous year and posted a modest improvement in performance over the past 6 months, as global risk aversion and severe domestic stressors pummeled domestic equity last year and the outlook for corporate profitability deteriorated. The local equity bourse posted a modest improvement of 6.0% y-td by March 27, and gained 5.4% within the scope of one month. The LuSE All Share Index increased to 4, points at the end of June 2017 from 4, points at the end of March On a year-to-date basis the Index increased by 14.29%. Financial Highlights a) Investment return The Madison Unit Trust Funds experienced a mixed performance with generally debt funds performing better than the equity funds with returns ranging from 1% to 10% for the debt and balanced Funds mainly as a result of increased Investments in commercial papers. The equity dominated funds recorded modest positive gains a sign of recovery from the poor performance of the equities in the last 12 months. The property fund was fully occupied during the quarter and recorded a surplus after distribution. b) Investment Portfolio - The combined investment portfolio for the Madison Unit Trust Funds stood at ZMK 73 million before cash and cash equivalents as at June 2017 up by 17%

4 Pg. 02 To Our Holders of Units from the same period last year. This portfolio is invested in Local fixed term instruments such as Bonds,Fixed placements and commercial papers at 78%, Propety at 15%,Equities at 3% while Investments in various Collective investment schemes stood at 4% c) Economic Outlook- Over the medium term, it is projected that Zambia s growth will accelerate to above 3% p.a. as the infrastructural gap is closed, mining sector performance improves on the back of higher commodity prices, increased production capacity and enhanced policy transparency, while lower borrowing costs will encourage private sector consumption and investment. Looking Ahead-Madison Unit Trust remains a dynamic place to invest, Your Fund Managers are confident that the Fund is well positioned to take full advantage of the domestic and global economic outlook and that your Fund managers possess the skills and local market knowledge required to maximize the rewards of doing so effectively. In addition, the Collective Investment Scheme Markets can provide diversification benefit and may offer a degree of insulation from global volatility. In a world of subdued growth, shifting policies and where heightened political and macroeconomic uncertainty dominate market sentiment, the Fund Manager believe that the Fund has the ability to generate strong relative returns, complemented by a sustainable income stream, is a particularly attractive proposition for investors with a medium to long-term investment horizon. MADISON ASSET MANGEMENT COMPANY LIMITED FUND MANAGERS

5 Pg. 03 Money Market Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 23,586,737 17,177,839 Cash at Bank 1,631, ,339 Maturities and Interest receivables 25, ,351 Other trade receivables - - Amounts due from ralated parties 3,533,570 7,476,736 Total Assets 28,777,899 25,441,265 Liabilities Current Liabilities Payables for units redeemed 645, ,534 Other accrued expenses 40,041 (271,034) Amounts due to ralated parties 392,691 2,782,542 Total Liabilities 1,078,355 2,822,041 Net Assets attributed to Holders of Units 27,699,545 22,619,223 Holders of Units Balance at start of Financial year 18,937,556 22,143,363 Units issued during the period 9,231,369 3,493,172 Units redeemed during the period (1,395,988) (3,838,723) Surplus attributed to Holders of Units 926, ,411 27,699,545 22,619,223

6 Pg. 04 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 2,120,701 1,170,829 Change In fairvalue of available for sale investments 20, ,478 Change in fairvalue of Property Investments - - Foreign currency gains/(losses) (132,903) (36,252) Rental Income - - Dividend Income - - Net Gain (Loss) on Financial Instruments 2,008,482 1,373,054 Expenses Management fees 663, ,646 Audit fees 33,731 23,447 Custodial fees 17,505 9,780 Regulatory fees 15,131 - Trustee Fees 2,787 3,760 Bank Charges 12,161 7,877 Investment revaluation 292,491 - VAT 44,338 73,134 1,081, ,644 Distributed income to Unit holders - - Surplus Income for the period 926, ,411 Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 22,168,881 12,260,064 Investments in Local Equities - - Investments in Local Collective Investment schemes 1,417,856 4,917,775 Investments in Local Property - - Total Investments 23,586,737 17,177,839

7 Pg. 05 Microfinance Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 12,872,792 18,481,273 Cash at Bank 1,607,532 (197,438) Maturities and Interest receivables 382,878 - Other trade receivables 56,875 56,875 Amounts due from ralated parties 5,080,731 5,922,151 Total Assets 20,000,808 24,262,862 Liabilities Current Liabilities Payables for units redeemed 815, ,972 Other accrued expenses 401,167 45,890 Amounts due to ralated parties 875, ,352 Total Liabilities 2,092, ,214 Net Assets attributed to Holders of Units 17,908,319 23,319,648 Holders of Units Balance at start of Financial year 18,723,975 14,700,192 Units issued during the period 4,947,544 8,907,168 Units redeemed during the period (5,946,914) (1,489,224) Surplus attributed to Holders of Units 183,713 1,201,512 17,908,319 23,319,648

8 Pg. 06 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 1,224,548 1,648,700 Change In fairvalue of available for sale investments - 7,016 Change in fairvalue of Property Investments - - Foreign currency gains/(losses) (362,766) 25,968 Rental Income - - Dividend Income - - Net Gain (Loss) on Financial Instruments 861,782 1,681,685 Expenses Management fees 598, ,825 Audit fees 32,636 23,536 Custodial fees 18,490 - Regulatory fees 11,430 - Trustee Fees 2,697 3,775 Bank Charges 5,124 3,176 Other Expenses - - VAT 8,791 8, , ,173 Distributed income to Unit holders - - Surplus Income for the period 183,713 1,201,512 Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 12,872,792 18,471,537 Investments in Local Equities - - Investments in Local Collective Investment schemes 0 9,737 Investments in Local Property - - Total Investments 12,872,792 18,481,273

9 Pg. 07 Gratuity Investment Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 17,376,321 9,642,130 Cash at Bank 18,450 (598,062) Maturities and Interest receivables - - Other trade receivables 8,497 22,150 Amounts due from ralated parties 725,130 1,800,440 Total Assets 18,128,397 10,866,658 Liabilities Current Liabilities Payables for units redeemed 235,561 22,878 Other accrued expenses 389, ,106 Amounts due to ralated parties 259, ,802 Total Liabilities 884,501 1,009,786 Net Assets attributed to Holders of Units 17,243,896 9,856,873 Holders of Units Balance at start of Financial year 18,937,556 9,943,484 Units issued during the period 15,615,264 3,554,391 Units redeemed during the period (18,984,098) (4,580,270) Surplus attributed to Holders of Units 1,675, ,268 17,243,896 9,856,873

10 Pg. 08 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 2,067, ,309 Change In fairvalue of available for sale investments (30,296) 191,744 Change in fairvalue of Property Investments - - Foreign currency gains/(losses) (86,871) - Rental Income - - Dividend Income 34,802 (22,150) Net Gain (Loss) on Financial Instruments 1,984,871 1,067,902 Expenses Management fees 217, ,621 Audit fees 31,887 11,400 Custodial fees 22,009 - Regulatory fees 12,123 - Trustee Fees 2,634 2,302 Bank Charges 1,773 2,744 Other Expenses - - VAT 21,920 2, , ,634 Distributed income to Unit holders - - Surplus Income for the period 1,675, ,268 Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 15,812,680 8,606,590 Investments in Local Equities 937, ,771 Investments in Local Collective Investment schemes 626, ,769 Investments in Local Property - - Total Investments 17,376,321 9,642,130

11 Pg. 09 Equity Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 1,050,474 1,826,816 Cash at Bank 441,884 19,155 Maturities and Interest receivables - - Other trade receivables 18,078 38,684 Amounts due from ralated parties 374, ,753 Total Assets 1,884,592 2,469,407 Liabilities Current Liabilities Payables for units redeemed 1,921 (10,715) Other accrued expenses 14,800 (85,247) Amounts due to ralated parties 347, ,040 Total Liabilities 364, ,079 Net Assets attributed to Holders of Units 1,519,985 2,051,328 Holders of Units Balance at start of Financial year 1,565,708 1,584,042 Units issued during the period 110, ,669 Units redeemed during the period (192,649) (202,015) Surplus attributed to Holders of Units 36,926 (249,368) 1,519,985 2,051,328

12 Pg. 10 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 39,036 27,418 Change In fairvalue of available for sale investments 69,424 (246,134) Change in fairvalue of Property Investments - - Foreign currency gains/(losses) 0 - Rental Income - - Dividend Income 28,765 40,819 Net Gain (Loss) on Financial Instruments 137,224 (177,897) Expenses Management fees 91,507 64,751 Audit fees 2,226 2,186 Custodial fees 3,462 - Regulatory fees 966 1,363 Trustee Fees Bank Charges 1,700 2,216 Investment revaluation - - VAT ,298 71,471 Distributed income to Unit holders - - Surplus Income for the period 36,926 (249,368) Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 231, ,059 Investments in Local Equities 818,886 1,527,757 Investments in Local Collective Investment schemes - - Investments in Local Property - - Total Investments 1,050,474 1,826,816

13 Pg. 11 Education Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 431, ,525 Cash at Bank 247,010 67,369 Maturities and Interest receivables - - Other trade receivables 10,061 17,435 Amounts due from ralated parties 10,163 43,911 Total Assets 698, ,240 Liabilities Current Liabilities Payables for units redeemed 16,125 12,125 Other accrued expenses 4, Amounts due to ralated parties 10,000 1,000 Total Liabilities 30,642 13,852 Net Assets attributed to Holders of Units 667, ,388 Holders of Units Balance at start of Financial year 624, ,592 Units issued during the period 93, ,296 Units redeemed during the period (105,900) (74,742) Surplus attributed to Holders of Units 55,918 (757) 667, ,388

14 Pg. 12 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 32,613 13,100 Change In fairvalue of available for sale investments 19,537 (21,732) Change in fairvalue of Property Investments - - Foreign currency gains/(losses) - - Rental Income - - Dividend Income 8,771 9,098 Net Gain (Loss) on Financial Instruments 60, Expenses Management fees - - Audit fees 1, Custodial fees 2,976 - Regulatory fees Trustee Fees Bank Charges Investment revaluation - - VAT - 3 5,003 1,224 Distributed income to Unit holders - - Surplus Income for the period 55,918 (757) Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 138, ,228 Investments in Local Equities 247, ,879 Investments in Local Collective Investment schemes 45,302 87,418 Investments in Local Property - - Total Investments 431, ,525

15 Pg. 13 Madison Property Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June Jun Jun-17 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 11,413,749 11,329,999 Cash at Bank 497, ,416 Maturities and Interest receivables - - Other trade receivables 40,982 40,982 Amounts due from ralated parties 422, ,110 Total Assets 12,374,607 12,013,507 Liabilities Current Liabilities Payables for units redeemed 7,000 - Other accrued expenses 596, ,711 Amounts due to ralated parties 107, ,993 Total Liabilities 711, ,704 Net Assets attributed to Holders of Units 11,663,477 11,290,803 Holders of Units Balance at start of Financial year 11,572,877 11,149,923 Units issued during the period - - Units redeemed during the period - - Surplus attributed to Holders of Units 90, ,880 11,663,477 11,290,803

16 Pg. 14 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, Jun Jun-17 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 1,858 - Change In fairvalue of available for sale investments - - Change in fairvalue of Property Investments - - Foreign currency gains/(losses) - - Rental Income 764, ,646 Dividend Income - - Net Gain (Loss) on Financial Instruments 766, ,646 Expenses Management fees 98,323 98,866 Audit fees 19,292 11,801 Custodial fees 10, Regulatory fees - - Trustee Fees 185 1,893 Bank Charges 6,745 19,558 Investment revaluation 173, ,352 VAT 18, , ,361 Distributed income to Unit holders 349, ,404 Surplus Income for the period 90, ,880 Schedule of Investment Portfolio (unaudited) As at 30 June Jun Jun-17 Investments in Fixed Placements and Bonds 0 - Investments in Local Equities - - Investments in Local Collective Investment schemes - - Investments in Local Property 11,413,749 11,329,999 Total Investments 11,413,749 11,329,999

17 Pg. 15 Global Fund USD Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 452, ,075 Cash at Bank 59,291 84,152 Maturities and Interest receivables 911 1,892 Other trade receivables - - Amounts due from ralated parties 96,362 14,633 Total Assets 609, ,751 Liabilities Current Liabilities Payables for units redeemed Other accrued expenses (4,262) 908 Amounts due to ralated parties 11,572 2,047 Total Liabilities 7,901 3,547 Net Assets attributed to Holders of Units 601, ,204 Holders of Units Balance at start of Financial year 468,758 - Units issued during the period 377, ,968 Units redeemed during the period (269,681) (29,394) Surplus attributed to Holders of Units 24,681 (371) 601, ,204

18 Pg. 16 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 39,451 2,484 Change In fairvalue of available for sale investments - - Change in fairvalue of Property Investments - - Foreign currency gains/(losses) 1, Rental Income - - Dividend Income - - Net Gain (Loss) on Financial Instruments 41,031 3,182 Expenses Management fees 2, Audit fees 6,646 - Custodial fees 3,125 - Regulatory fees Trustee Fees 54 - Bank Charges 2,129 2,644 Investment revaluation - - VAT 1, ,350 3,552 Distributed income to Unit holders - - Surplus Income for the period 24,681 (371) Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 452, ,075 Investments in Local Equities - - Investments in Local Collective Investment schemes - - Investments in Local Property - - Total Investments 452, ,075

19 Pg. 17 Gratuity Dollar Fund Statement of Financial Position (unaudited) as at 30 June 2017 and 30 June 2016 Assets Notes Current Assets Investments (Non-derivative Financial assets) 3 710, ,746 Cash at Bank 2,511 (156) Maturities and Interest receivables - - Other trade receivables - - Amounts due from ralated parties 37,344 37,344 Total Assets 750, ,934 Liabilities Current Liabilities Payables for units redeemed - - Other accrued expenses 19,034 - Amounts due to ralated parties 3,222 13,198 Total Liabilities 22,255 13,198 Net Assets attributed to Holders of Units 727, ,737 Holders of Units Balance at start of Financial year 649,447 - Units issued during the period 59, ,056 Units redeemed during the period - - Surplus attributed to Holders of Units 18,513 10, , ,737

20 Pg. 18 Statements of Comprehensive Income (unaudited) For the periods ended 30 June, 2017 and 30 June, 2017 Net Gain (Loss) on Financial Instruments Interest from Held to Maturity Investments 26,967 8,743 Change In fairvalue of available for sale investments - 2,094 Change in fairvalue of Property Investments - - Foreign currency gains/(losses) 4,147 - Rental Income - - Dividend Income - - Net Gain (Loss) on Financial Instruments 31,113 10,837 Expenses Management fees 6,907 - Audit fees 1,052 - Custodial fees 3,211 - Regulatory fees Trustee Fees 87 - Bank Charges Investment revaluation - - VAT , Distributed income to Unit holders - - Surplus Income for the period 18,513 10,681 Schedule of Investment Portfolio (unaudited) As at 30 June 2017 Investments in Fixed Placements and Bonds 585, ,748 Investments in Local Equities - - Investments in Local Collective Investment schemes 124, ,998 Investments in Local Property - - Total Investments 710, ,746

21 Notes to Financial Statements Pg. 19 Notes to Financial Statements Financial Instrument Risks Investment Objective: Madison Unit Trust (the Fund) seeks to obtain a high level of income consistent with preservation of capital and liquidity by investing in highquality, short-term debt securities, high performing local equities, high end commercial or residential properties and Mutual Funds. Investment Strategies: The term-to-maturity of the Funds Investments is adjusted based on the portfolio advisor s outlook for interest rates, and the allocation of assets by credit quality is based on the portfolio advisor s review of macroeconomic conditions both inside and outside of Zambia. Significant risks that are relevant to the Fund are discussed here. From time to time the Fund Manager reviews risk management policies. The following is the current position Cash flow, fair value and interest rate risks- The main risk faced by the Fund is interest rate risk. This is mitigated by a combination of factors primarily diversifying the fund s investments in order to achieve a staggered maturity profile and Care is taken to have a reliable projection of the direction of future interest Madison Unit Trust rates, and to anticipate as much as possible shifts in the general level of interest rates Credit risk management - With regard to credit risk, the Fund does not advance any loans. Default risk is managed by ensuring that the vast majority of investments are in placements with reputable institutions.

22 Pg. 20 Notes to Financial Statements Regulatory risk- Any risks associated with the reputation of the Fund are dealt with as soon as they are perceived. These include matters arising from regulatory reviews, such as Securities and Exchange Commission inspections and are promptly and adequately dealt with as they arise. Customer complaints are thoroughly investigated and resolved to the satisfaction of both the Fund and the Customer. Capital Commitments There were no capital commitments as at 30 June 2017 Contingent Liabilities There were no known contingent liabilities as at 30 June 2017

23 Pg. 21 General Information General Information TRUSTEES - AMG Global Trustees are the Trustees of the Fund CUSTODIANS Stanbic Bank Zambia are the Custodians of the Fund AUDITORS Deloitte & Touche are the Auditors of the Fund FUND MANAGERS Madison Asset Management Company are the Fund Managers AUTHORISATION OF THE FUND- The manager is authorized under the Securities (Collective Investment Scheme) Rules, pursuant to the Securities Act, of 2016, to manage the Collective Investment Scheme- Madison Unit Trust